strategic-management

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Finally, I want to welcome and invite your suggestions, ideas, thoughts, comments, and questions regarding any part of this text or the ancillary materials. Please call me at 910-612-5343, fax me at 910-579-5132, e-mail me at freddavid9@gmail.com, or write me at the School of Business, Francis Marion University, Florence, SC 29501. I sincerely appreciate and need your input to continually improve this text in future editions. Your willingness to draw my attention to specific errors or deficiencies in coverage or exposition will especially be appreciated. Thank you for using this text. Fred R. David ACKNOWLEDGMENTS xxv
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Page 6: Editorial Director: Sally Yagan Edi
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Page 22: x CONTENTS Industry Analysis: The E
Page 26: xii CONTENTS Part 4 Strategy Evalua
Page 30: xiv CONTENTS Cases HOSPITALITY/ENTE
Page 38: xviii PREFACE issues and concerns.
Page 42: xx PREFACE current strategic-manage
Page 50: xxiv ACKNOWLEDGMENTS with overly ag
Page 56: About the Author Dr. Fred R. David
Page 60: Case Information Matrix (continued)
Page 64: Case Description Matrix (continued)
Page 68: Strategic Management CONCEPTS
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Page 76: McDonald’s in 2009 spent $2.1 bil
Page 80: Strategy implementation often is ca
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Page 88: BBDO, Cadbury Schweppes, General Mo
Page 92: Internal factors can be determined
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• Content with success—Particul
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always affect strategy-formulation
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excerpts from The Art of War. As yo
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Notes 1. Kathy Kiely, “Officials
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THE COHESION CASE McDonald’s Corp
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Internal Issues Organizational Stru
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EXHIBIT 5 McDonald’s Consolidated
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EXHIBIT 7 McDonald’s Corporation
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Wendy’s (WEN) Founded in 1969, ba
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CHAPTER 1 • THE NATURE OF STRATEG
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CHAPTER 1 • THE NATURE OF STRATEG
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Source: Shutterstock/Photographer D
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Wal-Mart Stores is bigger than Euro
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FIGURE 2-1 A Comprehensive Strategi
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formulation, implementation, and ev
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the boat. The ancient Greeks knew t
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Good mission statements identify th
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Writing and Evaluating Mission Stat
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3. Fred David, “How Companies Def
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Instructions Step 1 Refer back to p
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The Nature of an External Audit The
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Once information is gathered, it sh
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as much when the value of the dolla
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United States in 2000. Americans ag
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TABLE 3-6 Some Political, Governmen
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Competitive Forces The top U.S. com
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A recent article in the Wall Street
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TABLE 3-10 Intensity of Competition
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aw materials, possession of patents
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A sense of the future permeates all
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total weighted score is 1.0. The av
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A major responsibility of strategis
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11. M. J. Chen, “Competitor Analy
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Assurance of Learning Exercise 3C D
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the state of Washington, where it h
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Performing an internal audit requir
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The RBV has continued to grow in po
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An organization’s culture should
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The organizing function of manageme
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should examine various methods, suc
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goods companies. Test marketing can
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TABLE 4-5 Excellent Web Sites to Ob
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FIGURE 4-3 A Financial Ratio Trend
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TABLE 4-6 A Summary of Key Financia
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FIGURE 4-6 A Before and After Break
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TABLE 4-8 Implications of Various S
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TABLE 4-9 R&D Spending at Ten Sampl
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esults are printed. Individuals can
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FIGURE 4-7 An Example Value Chain f
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CHAPTER 4 • THE INTERNAL ASSESSME
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6. If you and a partner were going
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Noble, Charles H., and Rajiv K. Sin
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Instructions Step 1 Join with two o
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includes such models such as Passat
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ottom-line performance are especial
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TABLE 5-4 Alternative Strategies De
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Integration Strategies Forward inte
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• When the advantages of stable p
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These five guidelines indicate when
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investment. Pursuing unrelated dive
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The largest U.S. chemical company b
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TABLE 5-6 Recent Divestitures Paren
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These three guidelines indicate whe
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leadership strategy successfully, a
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a focus strategy may concentrate on
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to minimize risk. Joint ventures an
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Cross-border merger and acquisition
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First Mover Advantages First mover
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Medical Organizations The $200 bill
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De-integration (p. 140) Differentia
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37. Robert Davis, “Net Empowering
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Instructions Step 1 Go to your coll
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Source: Shutterstock “Notable Quo
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On June 9, 2009, Apple did however
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FIGURE 6-2 The Strategy-Formulation
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Rival firms that copy ideas, innova
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environment may not be revealed in
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FIGURE 6-5 Example Strategy Profile
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The Boston Consulting Group (BCG) M
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Cows were yesterday’s Stars. Cash
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FIGURE 6-9 The Internal-External (I
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develop both geographic and product
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TABLE 6-6 The Quantitative Strategi
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4 = highly attractive. By attractiv
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strategy issues that face an enterp
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example, boards could require CEOs
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gic decisions, but they should neve
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38. Rank BusinessWeek’s “princi
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ASSURANCE OF LEARNING EXERCISES Ass
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CHAPTER 6 • STRATEGY ANALYSIS AND
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• How has the role of the board c
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operating policy encourages all emp
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CHAPTER 7 • IMPLEMENTING STRATEGI
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FIGURE 7-6 Typical Top Managers of
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Kaplan, Robert S., and David P. Nor
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Assurance of Learning Exercise 7C U
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Source: Shutterstock/AJT “Notable
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FIGURE 8-2 CHAPTER 8 • IMPLEMENTI
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FIGURE 8-3 40.0 36.0 32.0 28.0 24.0
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Current Readings CHAPTER 8 • IMPL
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FIGURE 9-1 A Comprehensive Strategi
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TABLE 9-2 Examples of Organizationa
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TABLE 9-3 A Strategy-Evaluation Ass
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CHAPTER 9 • STRATEGY REVIEW, EVAL
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Published Sources of Strategy-Evalu
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Contingency Planning CHAPTER 9 •
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12. American Accounting Association
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Source: Ivan Cholakov Gostock “No
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CHAPTER 10 • BUSINESS ETHICS/SOCI
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Conclusion Key Terms and Concepts B
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FIGURE 11-1 A Comprehensive Strateg
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8. A firm’s power and prestige in
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A Weak Economy A weak economy still
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dramatically across cultures. For e
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5. Executives in India are used to
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Issues for Review and Discussion 1.
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CHAPTER 11 • GLOBAL/INTERNATIONAL
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“Notable Quotes” "Two heads are
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The Need for Specificity Do not mak
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The Comprehensive Written Analysis
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Answering Questions It is best to f
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25. Let someone else read and criti
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Oral Presentation—Step 4 External
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INDEX NAME A Abetti, Pier, 281 Acoh
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Martin, Karla L., 305 Mason, Charlo
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SUBJECT A Accounting (see Finance/A
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Advantages and disadvantages, 332 I
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Sustained competitive advantage, 9
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Strategic Management CASES
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1 Walt Disney Company — 2009 Mern
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EXHIBIT 2 Consolidated Income State
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EXHIBIT 4 Revenue and Operating Inc
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EXHIBIT 7 Disney’s Domestic Broad
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The company also has been hosting V
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television production, and syndicat
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investment is required in such prod
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insurance costs were equally challe
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EXHIBIT 2 Merryland Amusement Park
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The Screamer was one of the first c
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Altria’s specific funding conditi
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CASE 2 • MERRYLAND AMUSEMENT PARK
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EXHIBIT 7 Kansas Employment Summary
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Much of JetBlue’s business model
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CASE 3 • JETBLUE AIRWAYS CORPORAT
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EXHIBIT 4 JetBlue Corporation: Cons
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EXHIBIT 6 Airline Bookings 2008 Boo
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EXHIBIT 9 Direct Competitor Compari
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4 AirTran Airways, Inc. — 2009 Ch
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EXHIBIT 1 AirTran’s Leadership Te
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EXHIBIT 2 Airline Quality Rating Ra
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EXHIBIT 5 AirTran’s Selected Fina
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EXHIBIT 7 Income Statement (all num
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EXHIBIT 10 AirTran’s Top Domestic
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“AirTran Airways Launches Buy-On-
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Divisions of the Company For FY2008
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EXHIBIT 3 The Three Largest Small-B
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EXHIBIT 5 Family Dollar, by State a
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EXHIBIT 6 Family Dollar’s Consoli
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6 Wal-Mart Stores, Inc. — 2009 Am
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EXHIBIT 2 Consolidated Balance Shee
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EXHIBIT 3 End-of-Year Store Count W
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EXHIBIT 4 Wal-Mart’s Organization
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Sam’s Clubs Sam’s Clubs are mem
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everyday. With this technology, Wal
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Action (EEO/AA) employer, but it ha
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7 Whole Foods Market, Inc. — 2009
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product sales accounted for approxi
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grocery store sector of retail was,
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EXHIBIT 1 Whole Foods Market, Inc.,
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EXHIBIT 4 Whole Foods Properties (a
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8 Macy’s, Inc. — 2009 Rochelle
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EXHIBIT 1 Macy’s Divisional Organ
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Macy’s recently launched a series
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(10,860) and 12,000 more than J.C.
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9 Yahoo! Inc. — 2009 Hamid Kazero
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EXHIBIT 1 Consolidated Statements o
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EXHIBIT 3 Yahoo! Revenues by Groups
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EXHIBIT 7 Yahoo! versus Google Comp
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10 eBay Inc. — 2009 Lori Radulovi
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By 2009, eBay has attained customiz
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Bill Me Later, acquired by eBay Inc
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to gains sales by referring custome
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EXHIBIT 3 eBay Consolidated Income
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EXHIBIT 6 eBay Supplemental Operati
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11 Wells Fargo Corporation — 2009
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EXHIBIT 2 Wells Fargo/Wachovia U.S.
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EXHIBIT 3 Wells Fargo’s Income St
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EXHIBIT 5 Wells Fargo—Business Se
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EXHIBIT 7 Wells Fargo versus Rivals
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high-quality southern-style doughnu
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contain a doughnut-making productio
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Mission and Vision The current comp
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All stores are required to have a s
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13 Starbucks Corporation — 2009 S
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Our Coffee It has always been, and
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EXHIBIT 3 Starbucks’ Balance Shee
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EXHIBIT 4 Segment Financial Data Se
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Conclusion Starbucks continues to b
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EXHIBIT 1 USPS Summary Financial Da
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EXHIBIT 2 USPS Operating Expenses (
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CASE 14 • THE UNITED STATES POSTA
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EXHIBIT 10 USPS Vehicle Inventory (
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EXHIBIT 13 USPS Operating Statistic
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EXHIBIT 13 USPS Operating Statistic
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EXHIBIT 1 Amtrak Route Map SEATTLE
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CASE 15 • NATIONAL RAILROAD PASSE
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CASE 16 • GOODWILL OF SAN FRANCIS
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EXHIBIT 6 Goodwill Revenue Growth R
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wooden shed with the words “Harle
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notes, due in 2014. The money will
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84 percent, 80 percent, and 79 perc
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EXHIBIT 4 Income Statements (2006-2
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net income were down 2.3 percent an
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EXHIBIT 1 Ford Motor Company Corpor
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Motorcraft Ford purchased Electric
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carrying over $1 billion in goodwil
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In late 2009, Ford added shifts at
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the largest food company in the Uni
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way of creating some interactivity
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At year-end 2009, the company had s
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Prior to 2006, ConAgra was a holdin
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process, and Hershey extensively re
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EXHIBIT 2 The Hershey Company Conso
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acquisitions and joint ventures wit
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Cadbury Cadbury, formerly known as
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21 Johnson & Johnson — 2009 Shary
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EXHIBIT 2 J&J’s Mission Statement
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EXHIBIT 4 J&J Facilities Pharmaceut
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EXHIBIT 5 Large Competitors to J&J
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Even the largest pharmaceutical com
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EXHIBIT 8 J&J Balance Sheets 2006-2
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James Preston, the CEO of Avon, fou
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In their new promotions, the Avon l
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EXHIBIT 5 Avon’s Balance Sheets (
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EXHIBIT 7 Avon’s Executive Team A
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ut he also proved he knew how to ma
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Internal Factors Business Structure
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EXHIBIT 3 Molson Coors Consolidated
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The market for the target customer
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Another factor has been the current
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cost about $14 a case, or $5 less t
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Bradham followed the example of Coc
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EXHIBIT 2 PepsiCo 2008 Income State
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EXHIBIT 6 World Demand for the Nona
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EXHIBIT 7 World Chip Market In mill
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Coca-Cola will continue to concentr
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25 Pfizer, Inc. — 2009 Vijaya Nar
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EXHIBIT 1 Revenues by Key Products
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Pfizer’s consolidated Balance She
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EXHIBIT 7 Overview of Direct Compet
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number should reach $265 billion in
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EXHIBIT 1 Merck’s Recent Acquisit
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EXHIBIT 3 Merck’s Sales by Produc
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Industry Issues, Facts, and Figures
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prescriptions. Because the price of
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27 Nike, Inc. — 2010 1 Randy Harr
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The company has set a strategic goa
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EXHIBIT 5 Nike’s Income Before Ta
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Nike Customers and Price Points Bec
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Competition Competition in the athl
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eliminate quotas and tariff barrier
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The company acquired FrogTrader to
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CASE 28 • CALLAWAY GOLF COMPANY
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Pacific PTY Ltd., Callaway Golf (Sh
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3.5 percent for the first quarter o
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public and private golf clubs are e
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Standard Oil and created Standard o
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EXHIBIT 3 Statement of Income (mill
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Marketing Marketing in an energy co
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company in the world in 2007. The 2
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