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Exploring corporate strategy
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Mô tả chi tiết
corporatE stratEgy
Exploring
WHittington
scHolEs
JoHnson
8TH
EDITION
www.pearson-books.com An imprint of
corporatE stratEgy
Exploring
gErry JoHnson
KEVan scHolEs
ricHarD WHittington
8TH EDITION
succeed in your studies, enhance your understanding and improve your
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Join them today and stay at the top of the class with the 8th edition of
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assignment (which I passed easily) I drew heavily on the concepts and ideas introduced in
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customer reviews of 7th edition on amazon.co.uk
are small fi rms more innovative than large organisations?
What impact do culture and history have on strategy?
What does a strategist actually do?
Explore key and contemporary questions such as these, as well as all the fundamental
concepts and tools of strategy, plus:
• Get the latest developments in this fast-moving fi eld: brand new chapters on innovation
and entrepreneurship, international strategy and the practice of strategy keep
you at the cutting edge
• Read the most recent and intriguing strategy ‘stories’: case studies on familiar
and headline-grabbing organisations, such as eBay, Skype, Virgin and many more
• Develop your critical thinking skills, using key debates and critical commentaries
throughout the text
9780273711919_COVER.indd 1 17/10/07 11:00:52
EXPLORING
CORPORATE STRATEGY
Visit the Exploring Corporate Strategy, eighth edition Companion Website at
www.pearsoned.co.uk/ecs. Register to create your own personal account using
the access code supplied with this book to find valuable student learning material
including:
● Key concepts: audio downloads, video clips, animations and quick tests to
reinforce your understanding
● Chapter audio summaries that you can download or listen to online
● Self assessment questions and a personal gradebook so you can test your
learning and track your progress
● Revision flashcards to help you prepare for your exams
● A multi-lingual online glossary to explain key concepts
●l Guidance on how to analyse a case study
● Links to relevant sites on the web so you can explore more about the organisations featured in the case examples and case studies
ECS8_A01.qxd 22/10/2007 11:37 Page i
Gerry Johnson BA, PhD (left) is The Professor Sir Roland Smith Chair of
Strategic Management at Lancaster University School of Management and a
Senior Fellow of the UK Advanced Institute of Management (AIM) Research.
He is the author of numerous books, has published papers in many of the
foremost management research journals in the world and is a regular speaker
at the major academic conferences throughout the world. He also serves on
the editorial boards of the Academy of Management Journal, the Strategic
Management Journal and the Journal of Management Studies. His research
is into strategic management practice, processes of strategy development
and strategic change in organisations. As a consultant he works with senior
management teams on issues of strategy development and strategic change
where he applies many of the concepts from Exploring Corporate Strategy to
help them challenge, question and develop the strategies of their organisations.
Kevan Scholes MA, PhD, DMS, CIMgt, FRSA (centre) is Principal Partner of
Scholes Associates – specialising in strategic management. He is also Visiting
Professor of Strategic Management and formerly Director of the Sheffield
Business School, UK. He has extensive experience of teaching strategy to both
undergraduate and postgraduate students at several universities. In addition
his corporate management development work includes organisations in
manufacturing, many service sectors and a wide range of public service
organisations. He has regular commitments outside the UK – including Ireland,
Australia and New Zealand. He has also been an advisor on management
development to a number of national bodies and is a Companion of The
Chartered Management Institute.
Richard Whittington MA, MBA, PhD (right) is Professor of Strategic
Management at the Saïd Business School and Millman Fellow at New College,
University of Oxford. He is author or co-author of eight books and has
published many journal articles. He is a senior editor of Organization Studies
and serves on the editorial boards of Organization Science, the Strategic
Management Journal and Long Range Planning, amongst others. He has had
full or visiting positions at the Harvard Business School, HEC Paris, Imperial
College London, the University of Toulouse and the University of Warwick. He
is active in executive education and consulting, working with organisations
from across Europe, the USA and Asia. His current research is focused on
strategy practice and international management.
ECS8_A01.qxd 22/10/2007 11:37 Page ii
EIGHTH EDITION
EXPLORING
CORPORATE STRATEGY
Gerry Johnson
University of Strathclyde
Kevan Scholes
Sheffield Hallam University
Richard Whittington
Saïd Business School, University of Oxford
ECS8_A01.qxd 22/10/2007 11:37 Page iii
Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
Visit us on the World Wide Web at:
www.pearsoned.co.uk
Fifth edition published under the Prentice Hall imprint 1998
Sixth edition published under the Financial Times Prentice Hall imprint 2002
Seventh edition 2005
Eighth edition published 2008
© Simon & Schuster Europe Limited 1998
© Pearson Education Limited 2002, 2008
The rights of Gerry Johnson, Kevan Scholes and Richard Whittington to be identified as authors of this
work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without either the prior written permission of the publisher or a licence permitting restricted copying in
the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street,
London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark in this
text does not vest in the author or publisher any trademark ownership
rights in such trademarks, nor does the use of such trademarks imply any affiliation with or
endorsement of this book by such owners.
ISBN: 978-0-273-71191-9 (text only)
ISBN: 978-0-273-71192-6 (text and cases)
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1
11 10 09 08 07
Typeset in 9.5/13pt Linoletter by 35
Printed and bound by Rotolito Lombarda, Italy
The publisher’s policy is to use paper manufactured from sustainable forests.
ECS8_A01.qxd 22/10/2007 11:37 Page iv
Chapter 1 Introducing Strategy 1
Commentary The Strategy Lenses 29
Part I THE STRATEGIC POSITION 49
Introduction to Part I 51
Chapter 2 The Environment 53
Chapter 3 Strategic Capability 93
Chapter 4 Strategic Purpose 131
Chapter 5 Culture and Strategy 177
Commentary on Part I The Strategic Position 212
Part II STRATEGIC CHOICES 215
Introduction to Part II 217
Chapter 6 Business-Level Strategy 221
Chapter 7 Directions and Corporate-Level Strategy 255
Chapter 8 International Strategy 293
Chapter 9 Innovation and Entrepreneurship 323
Chapter 10 Strategy Methods and Evaluation 355
Commentary on Part II Strategic Choices 392
Part III STRATEGY IN ACTION 395
Introduction to Part III 397
Chapter 11 Strategy Development Processes 399
Chapter 12 Organising for Success 433
Chapter 13 Resourcing Strategies 473
Chapter 14 Managing Strategic Change 517
Chapter 15 The Practice of Strategy 557
Commentary on Part III Strategy in Action 594
Brief Contents
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ECS8_A01.qxd 22/10/2007 11:37 Page vi
List of Illustrations xvii
List of Exhibits xix
Preface xxiii
Getting the Most from Exploring Corporate Strategy xxvi
Guided Tour xxx
Acknowledgements xxxiv
1 Introducing Strategy 1
1.1 Introduction 2
1.2 What is strategy? 2
1.2.1 The characteristics of strategic decisions 2
1.2.2 Levels of strategy 7
1.2.3 The vocabulary of strategy 9
1.3 Strategic management 11
1.3.1 The strategic position 13
1.3.2 Strategic choices 14
1.3.3 Strategy in action 15
1.4 Strategy as a subject of study 16
1.5 Strategy as a job 18
1.6 The strategy lenses 19
Summary 22
Work assignments 23
Recommended key readings 23
References 24
Case example: Electrolux 25
Commentary The Strategy Lenses 29
Introduction to Part I 51
2 The Environment 53
2.1 Introduction 54
2.2 The macro-environment 55
2.2.1 The PESTEL framework 55
2.2.2 Building scenarios 57
Detailed Contents
Part I THE STRATEGIC POSITION
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viii DETAILED CONTENTS
2.3 Industries and sectors 59
2.3.1 Competitive forces – the five forces framework 59
2.3.2 The dynamics of industry structure 67
2.4 Competitors and markets 73
2.4.1 Strategic groups 73
2.4.2 Market segments 77
2.4.3 Identifying the strategic customer 78
2.4.4 Understanding what customers value – critical
success factors 79
2.5 Opportunities and threats 81
Summary 83
Work assignments 85
Recommended key readings 86
References 86
Case example: Global forces and the European brewing industry 88
3 Strategic Capability 93
3.1 Introduction 94
3.2 Foundations of strategic capability 95
3.2.1 Resources and competences 95
3.2.2 Threshold capabilities 96
3.2.3 Unique resources and core competences 97
3.3 Cost efficiency 99
3.4 Capabilities for achieving and sustaining competitive advantage 101
3.4.1 Value of strategic capabilities 102
3.4.2 Rarity of strategic capabilities 102
3.4.3 Inimitable strategic capabilities 103
3.4.4 Non-substitutability of strategic capabilities 106
3.4.5 Dynamic capabilities 107
3.5 Organisational knowledge 107
3.6 Diagnosing strategic capability 109
3.6.1 The value chain and value network 110
3.6.2 Activity maps 114
3.6.3 Benchmarking 116
3.6.4 SWOT 119
3.7 Managing strategic capability 120
3.7.1 Limitations in managing strategic capabilities 120
3.7.2 Developing strategic capabilities 121
3.7.3 Managing people for capability development 121
Summary 123
Work assignments 125
Recommended key readings 125
References 126
Case example: Making eBay work 128
4 Strategic Purpose 131
4.1 Introduction 132
4.2 Corporate governance 133
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DETAILED CONTENTS ix
4.2.1 The governance chain 133
4.2.2 Corporate governance reforms 138
4.2.3 Different governance structures 138
4.2.4 How governing bodies influence strategy 143
4.2.5 Ownership choices 144
4.3 Business ethics and social responsibility 145
4.3.1 Corporate social responsibility 145
4.3.2 The role of individuals and managers 150
4.4 Stakeholder expectations 153
4.4.1 Stakeholder mapping 156
4.4.2 Power 160
4.5 Organisational purposes: values, mission, vision and objectives 163
4.5.1 Corporate values 163
4.5.2 Mission and vision statements 164
4.5.3 Objectives 164
Summary 167
Work assignments 169
Recommended key readings 170
References 170
Case example: Product Red and Gap 173
5 Culture and Strategy 177
5.1 Introduction 178
5.2 Strategic drift 179
5.2.1 Strategies change incrementally 179
5.2.2 The tendency towards strategic drift 180
5.2.3 A period of flux 183
5.2.4 Transformational change or death 183
5.3 Why is history important? 184
5.3.1 Path dependency 185
5.3.2 Historical analysis 188
5.4 What is culture and why is it important? 189
5.4.1 National and regional cultures 190
5.4.2 The organisational field 192
5.4.3 Organisational culture 194
5.4.4 Organisational subcultures 195
5.4.5 Culture’s influence on strategy 196
5.4.6 Analysing culture: the cultural web 197
5.4.7 Undertaking cultural analysis 201
5.5 Managing in an historic and cultural context 203
Summary 205
Work assignments 205
Recommended key readings 206
References 206
Case example: Marks & Spencer (A) 208
Commentary on Part I The Strategic Position 212
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x DETAILED CONTENTS
Introduction to Part II 217
6 Business-Level Strategy 221
6.1 Introduction 222
6.2 Identifying strategic business units 223
6.3 Bases of competitive advantage: the ‘strategy clock’ 224
6.3.1 Price-based strategies (routes 1 and 2) 227
6.3.2 (Broad) Differentiation strategies (route 4) 229
6.3.3 The hybrid strategy (route 3) 230
6.3.4 Focused differentiation (route 5) 230
6.3.5 Failure strategies (routes 6, 7 and 8) 231
6.4 Sustaining competitive advantage 231
6.4.1 Sustaining price-based advantage 232
6.4.2 Sustaining differentiation-based advantage 233
6.4.3 Strategic lock-in 235
6.4.4 Responding to competitive threat 236
6.5 Competitive strategy in hypercompetitive conditions 238
6.5.1 Overcoming competitors’ bases of strategic advantage 238
6.5.2 Characteristics of successful hypercompetitive strategies 239
6.6 Competition and collaboration 240
6.7 Game theory 241
6.7.1 The ‘prisoner’s dilemma’: the problem of cooperation 243
6.7.2 Sequential games 246
6.7.3 Changing the rules of the game 246
Summary 247
Work assignments 249
Recommended key readings 250
References 250
Case example: Madonna: still the reigning queen of pop? 251
7 Directions and Corporate-Level Strategy 255
7.1 Introduction 256
7.2 Strategic directions 257
7.2.1 Market penetration 258
7.2.2 Consolidation 260
7.2.3 Product development 261
7.2.4 Market development 261
7.2.5 Diversification 262
7.3 Reasons for diversification 262
7.3.1 Related diversification 265
7.3.2 Unrelated diversification 267
7.3.3 Diversification and performance 269
7.4 Value creation and the corporate parent 270
7.4.1 Value-adding and value-destroying activities of
corporate parents 270
Part II STRATEGIC CHOICES
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DETAILED CONTENTS xi
7.4.2 The portfolio manager 274
7.4.3 The synergy manager 275
7.4.4 The parental developer 276
7.5 Portfolio matrices 278
7.5.1 The growth/share (or BCG) matrix 278
7.5.2 The directional policy (or GE–McKinsey) matrix 280
7.5.3 The parenting matrix 282
Summary 286
Work assignments 286
Recommended key readings 287
References 287
Case example: The Virgin Group 289
8 International Strategy 293
8.1 Introduction 294
8.2 Internationalisation drivers 295
8.3 National and international sources of advantage 300
8.3.1 Porter’s Diamond 300
8.3.2 The international value network 302
8.4 International strategies 304
8.5 Market selection and entry 306
8.5.1 Market characteristics 307
8.5.2 Competitive characteristics 308
8.5.3 Entry modes 311
8.6 Internationalisation and performance 314
8.7 Roles in an international portfolio 315
Summary 316
Work assignments 318
Recommended key readings 318
References 319
Case example: Lenovo Computers: East meets West 320
9 Innovation and Entrepreneurship 323
9.1 Introduction 324
9.2 Innovation dilemmas 325
9.2.1 Technology push or market pull 326
9.2.2 Product or process innovation 328
9.2.3 Technological or business model innovation 329
9.3 Innovation diffusion 331
9.3.1 The pace of diffusion 332
9.3.2 The diffusion S-curve 333
9.4 Innovators and followers 336
9.4.1 First-mover advantages and disadvantages 336
9.4.2 First or second? 337
9.4.3 The incumbents’ response 338
9.5 Entrepreneurship and relationships 342
9.5.1 Stages of entrepreneurial growth 342
9.5.2 Entrepreneurial relationships 343
9.5.3 Social entrepreneurship 346
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Summary 348
Work assignments 349
Recommended key readings 350
References 350
Case example: Skype: innovators and entrepreneurs 352
10 Strategy Methods and Evaluation 355
10.1 Introduction 356
10.2 Methods of pursuing strategies 356
10.2.1 Organic development 357
10.2.2 Mergers and acquisitions 357
10.2.3 Strategic alliances 360
10.3 Strategy evaluation 365
10.3.1 Suitability 366
10.3.2 Acceptability 368
10.3.3 Feasibility 380
10.3.4 Evaluation criteria: three qualifications 382
Summary 383
Work assignments 385
Recommended key readings 386
References 386
Case example: Tesco conquers the world? 389
Commentary on Part II Strategic Choices 392
Introduction to Part III 397
11 Strategy Development Processes 399
11.1 Introduction 400
11.2 Intended strategy development 401
11.2.1 Strategy development through strategic leadership:
the role of vision and command 401
11.2.2 Strategic planning systems 402
11.2.3 Externally imposed strategy 407
11.3 Emergent strategy development 407
11.3.1 Logical incrementalism 408
11.3.2 Resource allocation processes 411
11.3.3 Organisational politics 414
11.3.4 Cultural processes 416
11.4 Patterns of strategy development 417
11.5 Challenges for managing strategy development 419
11.5.1 Managing intended and realised strategy 419
11.5.2 The learning organisation 421
11.5.3 Strategy development in uncertain and complex
conditions 422
Part III STRATEGY IN ACTION
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DETAILED CONTENTS xiii
Summary 424
Work assignments 426
Recommended key readings 427
References 427
Case example: Strategy development at Intel 429
12 Organising for Success 433
12.1 Introduction 434
12.2 Structural types 436
12.2.1 The functional structure 436
12.2.2 The multidivisional structure 438
12.2.3 The matrix structure 440
12.2.4 The transnational structure 440
12.2.5 Project-based structures 443
12.2.6 Choosing structures 444
12.3 Processes 446
12.3.1 Direct supervision 447
12.3.2 Planning processes 447
12.3.3 Cultural processes 450
12.3.4 Performance targeting processes 450
12.3.5 Market processes 453
12.4 Relationships 455
12.4.1 Relating internally 455
12.4.2 Relating externally 459
12.4.3 Configuration dilemmas 463
Summary 465
Work assignments 467
Recommended key readings 467
References 468
Case example: Hurricane Katrina: human-made disaster? 470
13 Resourcing Strategies 473
13.1 Introduction 474
13.2 Managing people 475
13.2.1 People as a resource 475
13.2.2 People and behaviour 477
13.2.3 Organising people 478
13.2.4 Implications for managers 480
13.3 Managing information 482
13.3.1 Information and strategic capability 482
13.3.2 Information and changing business models 485
13.3.3 Implications for managers 487
13.4 Managing finance 489
13.4.1 Managing for value 490
13.4.2 Funding strategy development 492
13.4.3 The financial expectations of stakeholders 496
13.5 Managing technology 497
13.5.1 Technology and the competitive situation 497
13.5.2 Technology and strategic capability 500
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13.5.3 Organising technology development 503
13.5.4 Implications to managers 505
13.6 Integrating resources 505
Summary 509
Work assignments 510
Recommended key readings 511
References 511
Case example: Video games 514
14 Managing Strategic Change 517
14.1 Introduction 518
14.2 Diagnosing the change situation 519
14.2.1 Types of strategic change 519
14.2.2 The importance of context 521
14.2.3 Diagnosing the cultural context 524
14.2.4 Forcefield analysis 526
14.3 Change management: styles and roles 527
14.3.1 Roles in managing change 527
14.3.2 Styles of managing change 529
14.4 Levers for managing strategic change 533
14.4.1 Challenging the taken for granted 533
14.4.2 Changing operational processes and routines 534
14.4.3 Symbolic processes 535
14.4.4 Power and political processes 538
14.4.5 Change tactics 539
14.5 Managing strategic change programmes 541
14.5.1 Strategy reconstruction and turnaround strategy 541
14.5.2 Managing revolutionary strategic change 544
14.5.3 Managing evolutionary strategic change 545
14.5.4 Some overall lessons on the management of change
programmes 546
Summary 547
Work assignments 549
Recommended key readings 550
References 550
Case example: Managing change at Faslane 553
15 The Practice of Strategy 557
15.1 Introduction 558
15.2 The strategists 559
15.2.1 Top managers and directors 559
15.2.2 Strategic planners 561
15.2.3 Middle managers 563
15.2.4 Strategy consultants 565
15.2.5 Who to include in strategy? 566
15.3 Strategising 569
15.3.1 Strategy analysis 569
15.3.2 Strategic issue selling 570
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