MGMT 9th Edition Williams Solutions Manual Download

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Chapter 6: Organizational Strategy
Solution Manual for MGMT 9th Edition Williams

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Pedagogy Map
This chapter begins with the learning outcome summaries and terms covered in the chapter, followed by a
set of lesson plans for instructors to use to deliver the content in Chapter 6.
 Lesson Plan for Lecture (for large sections)

 Lesson Plan for Group Work (for smaller classes)
 Assignments with Teaching Tips and Solutions
 What Would You Do? Case Assignment––Walt Disney Company
 Self-Assessment––Strategy Questionnaire
 Management Decision––Dealing with Competition
 Management Team Decision––A New Strategy for India?
 Practice Being a Manager––Most Likely to Succeed
 Develop Your Career Potential––Individual SWOT Analysis
 Management Workplace: Profile on Theo Chocolate
 Review Questions
 Group Activity
 Assignment
 Additional Resources
Highlighted Assignments Key Points
What Would You Do? Case The Walt Disney Company must resolve several strategic
Assignment questions as it faces struggling brands and products.
Self-Assessment Students assess how comfortable they are competing and
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being in competitive environments.
Management Decision Students must decide how they will respond to a competitor’s
decision to keep selling soft drinks at primary and secondary
schools.
Management Team Decision A management team must decide if a cell phone company
needs to adopt a new strategy for selling cell phones in India.
Practice Being a Manager Students consider competitive advantage as they work to win
a “Most Likely to Succeed” award.
Develop Your Career Potential Conducting an individual SWOT analysis can help students
plan their future.
Management Workplace Though Theo Chocolates’ products were well-received by

critics and organic food enthusiasts, it was not liked by
general consumers, leading founder Joe Whinney to come up
with a new strategy.
Supplemental Resources
4LTR Press supplements and online assets include PowerPoint Lectures, Test Banks, Executive Profiles,
What Would You Do Cases, Management Workplace Videos, Key Exhibits, and Self-Assessment
Activities. Within the exposition (narrative), students will experience interactive problems that include
matching and fill-in-the-blank problems. Also, they will encounter the second half of the WWYD Case
and the Self-Assessment content.
Learning Outcomes
6.1 Specify the components of sustainable competitive advantage, and explain why it is
important.
Firms use their resources to improve organizational effectiveness and efficiency. Resources are critical to
organizational strategy because they can help companies create and sustain an advantage over
competitors. A competitive advantage becomes a sustainable competitive advantage when other
companies cannot duplicate the value a firm is providing to customers. Four conditions must be met if a
firm’s resources are to be used to achieve a sustainable competitive advantage. The resources must be
valuable, rare, imperfectly imitable, and non-substitutable.
6.2 Describe the steps involved in the strategy-making process.
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With customers’ needs constantly growing and changing, and with competitors working harder, faster,
and smarter to meet those needs, the first step in creating a strategy is determining the need for strategic
change. A situational analysis, also called a SWOT analysis, for strengths, weaknesses, opportunities, and
threats, is an assessment of the strengths and weaknesses in an organization’s internal environment and
the opportunities and threats in its external environment. After determining the need for strategic change
and conducting a situational analysis, the last step in the strategy-making process is to choose strategic
alternatives that will help the company create or maintain a sustainable competitive advantage.
According to strategic reference point theory, managers choose between two basic alternative strategies.
They can choose a conservative, risk-avoiding strategy that aims to protect an existing competitive
advantage. Or they can choose an aggressive, risk-seeking strategy that aims to extend or create a
sustainable competitive advantage.
6.3 Explain the different kinds of corporate-level strategies.
Corporate-level strategy is the overall organizational strategy that addresses the question “What business
or businesses are we in or should we be in?” One of the standard strategies for stock market investors is
diversification, or owning stocks in a variety of companies in different industries. The purpose of this
strategy is to reduce risk in the overall stock portfolio (the entire collection of stocks). Investing the
profits and cash flows from mature, slow-growth businesses into newer, faster-growing businesses can
reduce long-term risk. The best-known portfolio strategy for guiding investment in a corporation’s
businesses is the Boston Consulting Group (BCG) matrix.
There are three kinds of grand strategies: growth, stability, and retrenchment/recovery. Companies can
grow in several ways. They can grow externally by merging with or acquiring other companies in the
same or different businesses. Another way to grow is internally, directly expanding the company’s
existing business or creating and growing new businesses. Companies often choose a stability strategy
when their external environment doesn’t change much or after they have struggled with periods of
explosive growth. The purpose of a retrenchment strategy is to turn around very poor company
performance by shrinking the size or scope of the business or, if a company is in multiple businesses, by
closing or shutting down different lines of the business. After cutting costs and reducing a business’s size
or scope, the second step in a retrenchment strategy is recovery. Recovery consists of the strategic actions
that a company takes to return to a growth strategy.
6.4 Describe the different kinds of industry-level strategies.
According to Harvard professor Michael Porter, five industry forces determine an industry’s overall
attractiveness and potential for long-term profitability. Industry-level strategies addresses the question
“How should we compete in this industry?” After analyzing industry forces, the next step in industry-
level strategy is to protect your company from the negative effects of industry-wide competition and to
create a sustainable competitive advantage. According to Michael Porter, there are three positioning
strategies: cost leadership, differentiation, and focus. The purpose of adaptive strategies is to choose an
industry-level strategy that is best suited to changes in the organization’s external environment. There are
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four kinds of adaptive strategies: defenders, prospectors, analyzers, and reactors.
Defenders aggressively “defend” their current strategic position by doing the best job they can to hold on
to customers in a particular market segment. Prospectors seek fast growth by searching for new market
opportunities, encouraging risk taking, and being the first to bring innovative new products to market.
Analyzers try to simultaneously minimize risk and maximize profits by following or imitating the proven
successes of prospectors. Reactors do not follow a consistent strategy. Rather than anticipating and
preparing for external opportunities and threats, reactors tend to react to changes in their external
environment after they occur.
6.5 Explain the components and kinds of firm-level strategies.
Firm-level strategy addresses the question “How should we compete against a particular firm?” Instead of
competing with an entire industry, most firms compete directly with just a few companies within it. Two
factors determine the extent to which firms will be in direct competition with each other: market
commonality and resource similarity. The more markets in which there is product, service, or customer
overlap, the more intense the direct competition between the two companies. Resource similarity is the
extent to which a competitor has similar amounts and kinds of resources, that is, similar assets,
capabilities, processes, information, and knowledge used to create and sustain an advantage over
competitors.
Terms
Acquisition Non-substitutable resource
Analyzers Portfolio strategy
Attack Prospectors
Bargaining power of buyers Question mark
Bargaining power of suppliers Rare resource
BCG matrix Reactors
Cash cow Recovery
Character of the rivalry Related diversification
Competitive advantage Resource similarity
Competitive inertia Resources
Core capabilities Response
Core firms Retrenchment strategy
Corporate-level strategy Secondary firms
Cost leadership Shadow-strategy task force
Defenders Situational (SWOT) analysis
Differentiation Stability strategy
Direct competition Star
Distinctive competence Strategic dissonance
Diversification Strategic group
Dog Strategic reference points
Firm-level strategy Sustainable competitive advantage
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Focus strategy Threat of new entrants

Grand strategy Threat of substitute products or services
Growth strategy Unrelated diversification
Imperfectly imitable resource Valuable resource
Industry-level strategy
Market commonality
Lesson Plan for Lecture (for large sections)

Pre-Class Prep for You: Pre-Class Prep for Your Students:
 Review the chapter and determine what  Bring the book.

points to cover.
 Bring the PPT slides.
Warm Up Begin Chapter 6 by asking students the following question: “Name a company that has a
strategic competitive advantage?” Then push them to articulate what they think gives that
company a strategic advantage.
Content Lecture slides: Make note of where the instructor stops so that they can pick up at the next
Delivery class meeting. Slides have teaching notes on them to help instructors as deliver the lecture.
Topics PowerPoint Slides Activities
6.1 Sustainable 1: Organizational Strategy Ask students to respond to

Competitive Advantage 2: Learning Outcomes this statement: Sustainable
3: Competitive Advantage competitive advantage only
4: Components of functions well as a theory
Sustainable Competitive and are impossible in
Advantage practice.
6.2 Strategy-Making 5: Steps of the Strategy- Use the college’s sports

Process Making Process conference to illustrate
6.2a Assessing the Need 6: Steps of the Strategy- strategic groups (core
for Strategic Change Making Process rivalries/competitors,
6.2b Situational Analysis 7: Exhibit 6.1: Three Steps secondary schools, transient
6.2c Choosing Strategic of the Strategy-Making schools).
Alternatives Process
6.3 Corporate-Level 8: Corporate-Level

Strategies Strategies
6.3a Portfolio Strategy 9: Corporate-Level
6.3b Grand Strategies Strategies
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6.4 Industry-Level 10: Industry-Level The adaptive strategy of

Strategies Strategies prospectors pushes
6.4a Five Industry Forces 11: Industry-Level managers to think about the
6.4b Positioning Strategies Strategies future. Ask students, “What
6.4c Adaptive Strategies 12: Industry-Level are the advantages and
Strategies disadvantages of belonging
13: Industry-Level to the party of the future?”
Strategies
14: Industry-Level
Strategies
6.5 Firm-Level 15: Components of Firm- Managers often visit

Strategies Level Strategies competitors’ stores or
6.5a Direct Competition 16: Types of Firm-Level consume competitors’
6.5b Strategic Moves of Strategies products or services in
Direct Competition order to benchmark their
own performance. Ask
students, “Do you do any
benchmarking in order to
boost your performance as
a student, an athlete, or
hobbyist of any sort? What
do you do and how does it
help?”
Summary 17: Summary
Key Terms 18: Key Terms

19: Key Terms
20: Key Terms
Adjust the lecture to include the activities in the right column. Some activities should be
done before introducing the concept, some after.
Conclusion Assignments:
and 1. Assign students to diagram the framework of direct competition for the movie rental
Preview industry. Students first need to create the list of companies to plot––like Netflix,
Redbox, Vudu, on-demand cable movies, Movielink (downloadable movies), and
even TiVo.
2. Assign students to complete the Management Decision about Pepsi.
3. Assign students to review Chapter 6 and read the next chapter on your syllabus.
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Remind students about any upcoming events.
Lesson Plan for Group Work (for smaller classes)

Pre-Class Prep for You: Pre-Class Prep for Your Students:
 Review the material to cover and modify  Bring the book.

the lesson plan to meet your needs.
 Set up the classroom so that small groups
of 4 to 5 students can sit together.
Warm Up Begin Chapter 6 by asking the students to name a company they think has a sustainable
competitive advantage. For each company they name, have them say why they think that
company has a sustainable advantage.
Content Lecture on Sustainable Competitive Advantage (Section 6.1).

Delivery
Break for group activity:
“iPod Advantage/Sirius Advantage”
Divide the class into small groups (3–4 students) and have them think about digital
music players or satellite radio. Whichever industry they choose, have them list the
companies operating in that space (there will be more for digital music players than
for satellite radio) and determine if they think any one company in particular has a
sustainable competitive advantage. If they decide “no,” then tell them to push harder
to decide if a company used to have an advantage and lost it (why) or if a company is
poised to create one (how).
Lecture on the Strategy-Making Process (Section 6.2).
Even if companies can’t produce a sustainable competitive advantage, that doesn’t mean
that their strategy-making process is flawed. As students learned in Chapter 3, the
external environment (not to mention the internal environment) is dynamic and can force
companies to meet rapidly changing demands.
Break for group activity:
“Risky Business”
Divide the class into small groups of 3 to 4 students and tell each group that it
represents the management team of a locally owned and operated water park, The
Beach, which has been in business for 15 years.* Revenues are $5 million per season;
equipment is neither new nor old; and the company has little debt service, a good
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reputation in the community, and a flood of job applicants each summer. Next season,
however, the Paramount’s King’s Island amusement park across the highway is
adding a water park to its traditional thrill ride attractions. Conduct a quick situational
analysis and then determine which strategic alternatives will help the company create
or maintain its competitive advantage.
*The Beach actually faced this strategic challenge in the late 1990s.
Come back together as a class to share results from the group activity.
Segue into a lecture on Corporate-Level Strategies––Portfolio Strategy (Section 6.3a).
Break for the following activity:
“Portfolio Strategy”
Divide the class into groups of 2 to 3 students to map the portfolio of a well-known,
diversified company such as Disney, Procter & Gamble, or HBO. Before doing the
exercise in class, check out a set of annual reports from the campus library. (If that is
not feasible, at least research the latest annual report for the company(ies) the
instructor would want students to work on and make lists of the various divisions.)
Give each student group an annual report and have students use their books to create a
diagram of the company’s portfolio. Ideally, students will be able to tell from the
report how each division is performing. If that is not possible, have them estimate. If
instructors teach in an electronic classroom, they can increase the group size and have
students consult online annual reports online directly from class.
Remind students of the disadvantages with portfolio strategy, and move into a discussion
on Grand Strategies (Section 6.3b).
Lecture on Industry-Level Strategies and Firm-Level Strategies (Sections 6.4 and 6.5).
As the instructor moves through the section on direct competition, refer back to the
activity with The Beach and Paramount’s King’s Island. Use it as a basis for talking
about direct competition and the strategic moves of direct competition. Other good
examples include:
 XM Satellite and Sirius, as they are the only two companies in a newly defined
industry, which itself is competing with traditional broadcast radio
 Dell, HP, Apple, Sony (computers)
 GM, Ford, Chrysler, Hyundai, Kia, Toyota, Honda, Volkswagen
 Coke, Pepsi, 7Up/Dr. Pepper, Jones Soda, Snapple, Red Bull
“Framework for Direct Competition”
Divide students into small groups of 3 to 4 students and have them diagram the
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framework of direct competition for the movie rental industry. Have students create
the list of companies to plot. If they have trouble, suggest Netflix, Intelliflix,
Blockbuster, Hollywood, on-demand cable movies, Movielink (downloadable
movies), and even TiVo.
Conclusion Assignments:
and 1. As an assignment, have students do the Management Decision on the competitive
Preview choices that Pepsi faces.
2. If instructors have finished covering Chapter 6, assign students to review the
chapter and read the next chapter on the syllabus.
Remind students about any upcoming events.
Assignments with Teaching Tips and Solutions
What Would You Do? Case Assignment
Walt Disney Company

Burbank, California
Over two decades, your predecessor and boss, CEO Michael Eisner, accomplished much, starting the
Disney Channel, the Disney Stores, and Disneyland Paris, and acquiring ABC television, Starwave Web
services (from Microsoft cofounder Paul Allan), and Infoseek (an early Web search engine). But his
strong personality and critical management style created conflict with shareholders, creative partners, and
board members, including Roy Disney, nephew of founder Walt Disney.
One of your first moves as Disney’s new CEO was repairing relationships with Pixar Studios and its then
CEO Steve Jobs. Pixar produced computer-animated movies for Disney to distribute and market. Disney
also had the right to produce sequels to Pixar Films, such as Toy Story, without Pixar’s involvement. Jobs
argued, however, that Pixar should have total financial and creative control over its films. When Disney
CEO Michael Eisner disagreed, relations broke down, with Pixar seeking other partners. On becoming
CEO, you approached Jobs about Disney buying Pixar for $7 billion. More important than the price,
however, was promising Jobs and Pixar’s leadership, President Ed Catmull and creative guru John
Lasseter, total creative control of Pixar’s films and Disney’s storied but struggling animation unit. Said
Jobs, “I wasn’t sure I could get Ed and John to come to Disney unless they had that control.”
Although Pixar and Disney animation thrived under the new arrangement, Disney still had a number of
critical strategic problems to address. Disney was “too old” and suffering from brand fatigue as its classic
but aging characters, Mickey Mouse (created in 1928) and Winnie-the-Pooh (licensed by Disney in 1961),
accounted for 80 percent of consumer sales. On the other hand, Disney was also “too young” and
suffering from “age compression,” meaning it appealed only to young children and not preteens, who
gravitated to Nickelodeon, and certainly not to teens at all. Finally, despite its legendary animated films,
over time Disney products had developed a reputation for low-quality production, poor acting, and weak
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scripts. Movies “High School Musical 3: Senior Year,” “Beverly Hills Chihuahua,” “Bolt,” “Confessions
of a Shopaholic,” “Race to Witch Mountain,” and “Bedtime Stories” disappointed audiences and failed to
meet financial goals. As you told your board of directors, “It’s not the marketplace, it’s our slate [of TV
shows and movies].”
With many of Disney’s brands and products clearly suffering, you face a basic decision: Should Disney
grow, stabilize, or retrench? Disney is an entertainment conglomerate with Walt Disney Studios (films),
parks and resorts (including Disney Cruise lines and vacations), consumer products (i.e., toys, clothing,
books, magazines, and merchandise), and media networks such as TV (ABC, ESPN, Disney Channels,
ABC Family), radio, and the Disney Interactive Media Group (online, mobile, and video games and
products). If Disney should grow, where? Like Pixar, is another strategic acquisition necessary? If so,
who? If stability, how do you improve quality to keep doing what Disney has been doing, but even better?
Finally, retrenchment would mean shrinking Disney’s size and scope. If you were to do this, what
divisions would you shrink or sell?
Next, given the number of different entertainment areas that Disney has, what business is it really in? Is
Disney a content business, creating characters and stories? Or is it a technology/distribution business that
simply needs to find ways to buy content wherever it can, for example, by buying Pixar and then
delivering that content in ways that customers want (i.e., DVDs, cable channels, iTunes, Netflix, social
media, Internet TV, etc.)?
Finally, from a strategic perspective, how should Disney’s different entertainment areas be managed?
Should there be one grand strategy (i.e., growth, stability, retrenchment) that every division follows, or
should each division have a focused strategy for its own market and customers? Likewise, how much
discretion should division managers have to set and execute their strategies, or should that be controlled
and approved centrally by the strategic planning department at Disney headquarters?
If you were CEO at Disney, what would you do?
Sources:
D. Fonda, L. Locke, J. Ressner, & R. Corliss, “When Woody Met Mickey,” Time, 6 February 2006, 46-47; R. Grover, “How Bob
Iger Unchained Disney,” BusinessWeek, 5 February 2007, 74-79; M. Marr, “Better Mousetrap: In Shakeup, Disney Rethinks
How It Reaches Audiences; Iger Seeks High-Tech Delivery Of Movies, TV Shows; Theater Owners Worry; 'Housewives' on a
Handheld,” Wall Street Journal, 1 October 2005, A1; R. Siklos, “Q&A, The Iger Difference,” Fortune, 28 April 2008, 90-94; R.
Siklos, “Bob Iger Rocks Disney,” Fortune, 19 January 2009, 80-86; T. Stanley, “Iger Needs Superpowers for Quick Fix at
Disney,” Advertising Age, 21 March 2005, 33-34.
What Really Happened? Solution
In the case, students learned that Disney’s acquisition of Pixar Studios was the key factor in saving
Disney’s animated film business, which had struggled and lost money over the last decade. While giving
Pixar total control over Disney animated film turned around that part of Disney’s business, the other parts
of Disney—films, consumer products, media networks, and online, mobile, and video games—
consistently underperformed expectations. In general, Disney products were seen as “too old” because of
aging characters like Mickey Mouse and Winnie-the-Pooh, or “too young,” because they only appealed to
very young children. Let’s find out what happened at Disney and see what strategic plans and steps CEO
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Bob Iger took to improve Disney’s competitive position.
With many of Disney’s brands and products clearly suffering, you face a basic decision. Should Disney
grow, stabilize or retrench? Disney is an entertainment conglomerate with Walt Disney Studios (films),
parks and resorts (including Disney Cruise lines and vacations), consumer products (i.e., toys, clothing,
books, magazines, and merchandise), and media networks such as TV (ABC, ESPN, shows and channels
(ABC, ESPN, Disney Channels, ABC Family), radio, and the Disney Interactive Media Group (online,
mobile, and video games and products). If Disney should grow, where? Like Pixar, is another strategic
acquisition necessary? If so, who? If stability, how do you improve quality to keep doing what Disney has
been doing, but even better? Finally, retrenchment would mean shrinking Disney’s size and scope. If you
were to do this, what divisions would you shrink or sell?
The purpose of a growth strategy is to increase profits, revenues, market share, or the number of places
(stores, offices, locations) in which a company does business. Companies can grow externally by merging
with or acquiring other companies in the same or different businesses. Or, they can grow internally,
directly expanding the company’s existing business or creating and growing new businesses. The purpose
of a stability strategy is to continue doing what the company has been doing, just doing it better.
Companies following a stability strategy try to improve the way in which they sell the same products or
services to the same customers. The purpose of a retrenchment strategy is to turn around very poor
company performance by shrinking the size or scope of the business or, if a company is in multiple
businesses, by closing or shutting down different lines of the business. The first step of a typical
retrenchment strategy might include making significant cost reductions; laying off employees; closing
poorly performing stores, offices, or manufacturing plants; or closing or selling entire lines of products or
services. After cutting costs and reducing a business’s size or scope, the second step in a retrenchment
strategy is recovery. Recovery consists of the strategic actions that a company takes to return to a growth
strategy.
Should Disney grow, stabilize or retrench? Soon after Bob Iger became CEO, Disney found itself in the
midst of a deep, global economic recession. Disney Films, which had been profitable, saw revenues drop
12 percent with a $12 million loss just a year after earning $97 million in profit. At Disney’s TV
networks, operating income fell by 34 percent as the number of viewers aged 18 to 49 dropped by 9.7
percent.
So, faced with losses and decreasing revenues, Iger employed a retrenchment strategy. For example, with
operating income also down sharply at Disney parks and resorts, Disney offered voluntary buyouts to 600
executives, hoping to significantly cut costs. Chair of the parks and resorts unit, Jay Rasulo, indicated that
the cuts would help build “an organization and cost structure that meet today’s economic realities.”
Likewise, further savings were achieved by consolidating departments, such as the menu planning
departments at Disney Land in California and the menu planning department at Disney World in Florida,
into one department to serve both parks.
While the first step of retrenchment includes significant cost reductions, the next step is recovery, taking
strategic actions to return to a growth strategy. Indeed, after cutting costs, Iger “doubled down” on
investments in theme parks, technology, and construction, all intended to return Disney to aggressive
growth. Said Iger, “In some cases we started [building and investing] before the recession, and some
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cases we were in it. Our construction costs have tended to be lower because we built in the downturn.”
Iger reasoned that long-term Disney couldn’t afford to pass up the significantly lower costs for
construction and expensive assets like cruise ships brought about by the recession. So, in the midst of the
recession, the company invested millions in the Disney Dream, a brand new cruise ship, $1 billion to
Disney’s California Adventure park (next door to Disney Land), and then spent billions more to expand
Hong Kong Disney Land, as well as a new Disney resort in Hawaii.
While those investments were intended to grow Disney organically, that is, to create growth in current
lines of business, Disney spent $4.3 billion to buy Marvel Entertainment, home to well know comic book
heroes such as X-Men, Captain America, Iron Man, and Thor, and $563 million to buy Playdom, a
company which makes games for Facebook users. When it comes to Marvel Entertainment, Iger
explained, “We’ve taken back distribution, or bought back distribution from [Viacom Inc.’s] Paramount,
for some critical franchises. Notably, Iron Man will be distributed by us, and Avengers. We’re developing
three live-action series for ABC and ABC Family. You can buy Marvel products at Disney stores. And
we're working on Marvel games.”
Disney’s acquisition of Playdom helps the company in terms of technology and online games. Iger noted
that, “Playdom gives us access to technology and to experience in a space that we felt we wanted and
needed to be in. We did not have that expertise in the company, and we felt that bringing it into the
company through an acquisition would get us there much faster than doing it organically.”
Next, given the number of different entertainment areas that Disney has, what business is Disney really
in? Is Disney a content business, creating characters and stories? Or is it a technology/distribution
business that simply needs to find ways to buy content wherever it can, for example, buying Pixar, and
then delivering that content in ways that customers want (i.e., DVDs, cable channels, iTunes, Netflix,
social media, Internet TV, etc.)?
Corporate-level strategy is the overall organizational strategy that addresses the question “What business
or businesses are we in or should we be in?” There are two major approaches to corporate-level strategy,
portfolio strategy and grand strategies, the latter of which is also discussed in question 3.
Corporate-level strategies such as portfolio strategy and grand strategies help managers determine what
businesses they should be in. Portfolio strategy focuses on lowering business risk by being in multiple,
unrelated businesses and by investing the cash flows from slow-growth businesses into faster-growing
businesses. One portfolio strategy, the BCG matrix, suggests that cash flows from cash cows should be
reinvested in stars and in carefully chosen question marks. Dogs should be sold or liquidated. Portfolio
strategy has several problems, however. Acquiring unrelated businesses, however, actually increases risk
rather than lowering it. The BCG matrix is often wrong when predicting companies’ futures (as dogs or
cash cows, for example). And redirecting cash flows can seriously weaken cash cows. The most
successful way to use the portfolio approach to corporate strategy is to reduce risk through related
diversification.
A grand strategy is a broad strategic plan used to help an organization achieve its strategic goals. Grand
strategies guide the strategic alternatives that managers of individual businesses or subunits may use in
deciding what businesses they should be in. As discussed in question 1, there are three kinds of grand
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strategies: growth, stability, and retrenchment/recovery.
Disney is an entertainment conglomerate with Walt Disney Studios (films), parks and resorts (including
Disney Cruise lines and vacations), consumer products (i.e., toys, clothing, books, magazines, and
merchandise), and media networks such as TV (ABC, ESPN, shows and channels (ABC, ESPN, Disney
Channels, ABC Family), radio, and the Disney Interactive Media Group (online, mobile, and video games
and products). Given the number of different entertainment areas that Disney has, what business is Disney
really in? Is Disney a content business, creating characters and stories? Or is it a technology/distribution
business that simply needs to find ways to buy content wherever it can, for example, buying Pixar, and
then delivering that content in ways that customers want (i.e., DVDs, cable channels, iTunes, Netflix,
social media, Internet TV, etc.)?
Disney, says Iger, is in the content business, and that creative content, not distribution, is Disney’s “heart
and soul.” “My goal is to make more great content, deliver it to more people, in more places, more often.”
Creating content in the form of storytelling, not technology, is why Disney bought Pixar Studies. Pixar
president Ed Catmull says, “We won’t let anything get ahead of the quality of the story.” That’s also why
Disney gave Catmull and Pixar control over Disney’s animation unit. Disney’s animated films were still
visually compelling, but their stories and character development were no longer compelling. By contrast,
at Pixar, content is more important than animation, and that’s reflected in Pixar staff members holding
regular meetings to critique and improve plot lines and characters across all of Pixar’s movie projects.
Finally, from a strategic perspective, how should Disney’s different entertainment areas be managed?
Should there be one grand strategy (i.e., growth, stability, retrenchment) that every division follows, or
should each division have a focused strategy for its own market and customers? Likewise, how much
discretion should division managers have to set and execute their strategies, or does that need to be
controlled and approved centrally by the strategic planning department at Disney headquarters?
As mentioned in question 2, a grand strategy is a broad strategic plan used to help an organization achieve
its strategic goals. Grand strategies guide the strategic alternatives that managers of individual businesses
or subunits may use in deciding what businesses they should be in. As discussed in question 1, there are
generally three kinds of grand strategies: growth, stability, and retrenchment/recovery. Rather than using
just one broad strategic plan to achieve its organizational goals, Disney, however, used two of those,
growth and retrenchment/recovery.
So, does that mean that Disney doesn’t have a grand strategy? No. Disney does in fact possess a grand
strategy, but it not based on growth, stability, or retrenchment/recovery. Instead, Disney’s grand strategy
is to manage its portfolio of brands in an integrative way, but differently from the ideas suggested in
portfolio theory. An example is the best way to illustrate this.
It was a textbook example of the “Disney way” of doing business: a new movie that set off a fountain of
spinoffs. There was a theme-park attraction, a series of Simon & Schuster books, a soundtrack album and
a line of toys and children’s clothing featuring the beloved heroine. To make sure kids knew about the
movie, Disney script writers planted repeated references to it in the company's television shows.
No, this isn’t just the well-recognized strategy that Disney used with Toy Story 3, the release of the first
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Winnie the Pooh movie in 50 years, or The Pirates of the Caribbean: On Stranger Tides, it’s the strategy
that Disney used in 1958 to promote and profit from its classic animated movie, Sleeping Beauty. As then
Disney President Roy Disney explained, “Our diversified activities are related and tend to complement
each other,” adding, “Integration is the key word around here. We don't do anything in one line without
giving a thought to its likely profitability in our other lines.” That was Disney’s strategy for decades, a
strategy from which it strayed, and the strategy to which Disney returned under CEO Bob Iger.
Iger, however, added one important dimension to Disney’s integrative portfolio strategy, brand
management. Each successful Disney movie (Beauty and the Beast), TV show (High School Musical), or
character (Winnie the Pooh) is a Disney brand. And, at Disney, under Iger, the strategy is to manage and
integrate those brands across the different parts of Disney’s businesses. Iger explains how it works:
These great character franchises were all brands unto themselves. But nobody was really managing those
brands, and decisions were being made in a vacuum. So if we determine that Toy Story is a real franchise
for the company, then Toy Story should get made. Now, you still have to have a great story and great
execution-and in the absence of that, you shouldn't make it. And not everything has to be a franchise. I
was recently asked whether Ratatouille was a franchise. I said no: Ratatouille is an extremely good
animated film and will be a classic unto itself, but it is not a franchise. You are not going to see
Ratatouille attractions in parks. When you look at Toy Story, we're making our third film, we're opening
two Toy Story Mania attractions at parks this summer, we have a very strong consumer products line, we
have a Toy Story musical opening on the cruise line, and we have a game in development-that's a
franchise.
So, with an integrative strategy that leverages key brands across Disney’s various businesses, how much
discretion are Disney’s division managers given to execute their strategies? On first thought, it would
seem that Disney’s strategic planning department would keep a tight rein to effectively execute the
company’s integrated strategy. CEO Iger, explains that he and his top executives drive and control this
process. Says Iger, “We get together about every six weeks with the heads of the Disney business units.
Sometimes we’ll even focus on a market-say, what’s going on in Japan with Pooh? We’ve also created
financial metrics to track them against each franchise so we can see what’s going on financially. If we see
a trend that is worrisome-or the opposite-we bring it up at this meeting.”
That tight integration, however, is balanced by tremendous creative autonomy for Disney’s division
managers and content creators. Remember, first and foremost, Disney is in the business of creating
content. And that means that the people managing content creation or the divisions where content is
created have to have the freedom to develop great stories and strong characters. Steve Jobs, Apple
Computer’s CEO, and former CEO of Pixar Studios explains that when Iger became CEO, “Disney was
really messed up. Bob looked at the guys running the divisions and said, ‘You’re in charge of your
businesses now.’” Because of this critical issue, one of the first steps Iger took as CEO was to disband
Disney’s long-standing strategic planning department.
Self-Assessment
Strategy Questionnaire
Strategy Questionnaire
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Generally speaking, a strategy is a plan of action that is designed to help you achieve a goal. Strategies
are not limited to grand plans that help you accomplish grand goals. You probably use strategies every
day in simple ways. For example, think of a route you regularly drive. Do you know how fast (or slow)
you need to go to catch all the lights on green? Or where to swerve to avoid a pothole? Or even when to
take a side street to shave a few minutes off your commute? Speeding up for one block in order to catch
the green lights at the next five intersections is a strategy. Strategy, then, involves thinking about how you
are going to accomplish what you set out (i.e., have planned) to do.
This assessment will provide some baseline information on attitudes you might have that will
relate to your management skills. Answer each of the questions either true or false. Try not to spend too
much time on any one item, and be sure to answer all the questions.
1. I get satisfaction from competing with others.

2. It’s usually not important to me to be the best.
3. Competition destroys friendships.
4. Games with no clear-cut winners are boring.
5. I am a competitive individual.
6. I will do almost anything to avoid an argument.
7. I try to avoid competing with others.
8. I would like to be on a debating team.
9. I often remain quiet rather than risk hurting another person.
10. I find competitive situations unpleasant.
11. I try to avoid arguments.
12. In general, I will go along with the group rather than create conflict.
13. I don’t like competing against other people.
14. I don’t like games that are winner-take-all.
15. I dread competing against other people.
16. I enjoy competing against an opponent.
17. When I play a game, I like to keep score.
18. I often try to outperform others.
19. I like competition.
20. I don’t enjoy challenging others even when I think they are wrong.
To determine your score, count the number of responses marked “True” and enter it here ____. You can
find the interpretation for your score at: login. cengagebrain.com
Source: J. M. Houston and R. D. Smither, “The Nature of Competitiveness: The Development and
Validation of the Competitiveness Index,” Educational and Psychological Measurement 52 (1992): 407–
418.
Interpreting the Score
Here is what your score means.
The inventory you just took is a competitiveness index designed to determine interpersonal
competitiveness in everyday contexts. For women, a 6 would be a low score and a 14 would be a high
score. The average score for women is 9.52. For men, 7 would be a low score and 15 would be a high
score. The average score for men is 12.06.
Remember that people tend to think they are less competitive than they really are. We generally
assign a negative connotation to “being competitive,” so we try to avoid the negative association. That is
unfortunate to a certain degree, because the positive aspects of competition, like planning, preparation,
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clear and forward thinking, and practiced execution, are nearly nonexistent in our understanding. Now
that you know your raw score relates to your level of competitiveness, take a minute to decide if you
agree with your score. That is, do you agree that you are competitive, or do you think the assessment
shows you as being more competitive than you “actually are”?
Management Decision
Purpose
The purpose of this activity is to push students to think about how companies respond to the decisions
made by their closest competitors.
Setting It Up
This activity works well as either a paired or individual activity. For more background information, ask
students to research Coca-Cola’s and Pepsi’s sales and revenues in primary and secondary schools.
Dealing with Competition
You are an executive at Pepsi, and you’ve just made what feels like a great decision. For many years,
various health and children’s groups have been calling for reductions of high-calorie and high-fat foods in
U.S. schools. Even if schools provided nutritious, fresh, and healthy food, they argued, it was no
competition for the salty and sugary treats available in vending machines. These groups even had the first
lady, Michelle Obama, leading a nationwide campaign.
In response to these campaigns, you’ve made a monumental decision, the first by any soft-drink
producer—to remove full-calorie beverages from all schools in over 200 countries by 2012. Your
decision is being hailed by numerous organizations, from the World Heart Federation and the American
Heart Association to the William J. Clinton Foundation. Not only do they credit your company for taking
an important first step in the fight against childhood obesity, but they also celebrate your willingness to
take initiative instead of waiting for government regulations.
Some of your colleagues, however, are not in a celebratory mood. Though your company has received
some great publicity, they’ve read numerous reports that Coca-Cola will take a different course. While all
soft-drink producers agreed not to sell full-calorie products in primary/elementary schools, Coca-Cola
recently revised its sales policy to allow sales in schools if parents or school officials request it. What is
more, Coca-Cola has decided that it will continue to sell full-calorie beverages to secondary schools, as
they argue that parents and school officials “should have the right to choose what is best for their
schools.”
Your colleagues worry that Coca-Cola’s policy could give them a huge competitive advantage. Even
though Pepsi will still have a presence in primary and secondary schools, their offerings will be limited to
low-calorie diet drinks, bottled water, low-fat milk, and juice with no added sugar. These products may
have to compete with Coca-Cola’s lineup of full-calorie, sugar-loaded drinks. There doesn’t seem to be
much doubt about what the students will choose. After all, if students opted for diet drinks or water in the
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first place, the sale of full-calorie drinks would not have turned into a public health issue.
Your colleagues fear that Pepsi’s commitment to public health will give Coca-Cola an insurmountable
competitive edge. So late in one business day, a group of colleagues come to your office. “You’re the one
that came up with this great plan,” they say, “how are we going to respond?”
Source:
Betsy McKay “Soft-drink sales drop in schools, group says.” The Wall Street Journal. March 8, 2010. B3; “Pepsi says no to soda
sales at schools” The Wall Street Journal. March 17, 2010. D3.
Questions:
1. Using Porter’s five industry forces, map the soft-drink industry.
According to Michael Porter, five industry forces determine an industry’s overall attractiveness and
potential for long-term profitability. These are the character of the rivalry, the threat of new entrants,
the threat of substitute products or services, the bargaining power of suppliers, and the bargaining
power of buyers.
The character of the rivalry between Pepsi and Coca-Cola is very strong, since each represents the
other’s main competition not just in the primary and secondary school market, but in virtually every
beverage market around the world. The rivalry between the two companies is marked by near-
constant moves against each other, whether it’s responding to an innovative product, or as described
in the case, responding to a strategic decision. Because Pepsi and Coca-Cola are so dominant in the
market, the threat of new entrants is somewhat high. Any company that wants to introduce a new
soft-drink will face enormous competition from both Coca-Cola and Pepsi products, which are
known and sold all over the world. What is more, a new beverage company must also invest heavily
in production, warehouse, transportation, and marketing to insure that its product gets made and
placed in enough stores. The threat of substitute products or services is also high in the soft-drink
industry. For people who don’t like Coca-Cola, there is Pepsi, or dozens of other cola drinks. For
people who don’t like Gatorade, there is Vitaminwater or PowerAde. In other words, consumers
have many choices among similar soft-drink products. It should be noted, however, that many
consumers are likely to point out that similar products are not identical; that is, that Coca-Cola is in
fact not a substitute for Pepsi and vice versa. Finally, with regard to bargaining power, the bargaining
power of suppliers is moderately high. Though no one soft-drink company has total control over the
market, they have developed enough brand loyalty that consumers will be very disappointed if a
particular retailer no longer carries, for example, Dr. Pepper or Mr. Pibb. Therefore, it is in the best
interest of retailers to cater to soft-drink suppliers. As for the bargaining power of buyers, this force
is low, since no soft-drink company sells just to one or two exclusive customer groups.
2. What are the risks and opportunities of the strategies followed by Pepsi? Of Coca-Cola?
For Pepsi, the primary benefit of its decision not to sell is developing the reputation that it cares
about public-health issues and is taking an active role in insuring that children get a proper diet. Even
though it will see a decrease in sales, its public reputation for doing the right thing will increase. The
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greatest risk, of course, is decreased sales and revenues. By pulling out of an entire market segment,
Pepsi will no doubt lose a tremendous amount of sales since soft drinks seem to be so popular in
primary and secondary schools. For Coca-Cola, the primary benefit and risk are the exact opposite of
Pepsi’s. Coca-Cola will likely benefit from increased sales of its drinks since students will only have
access to low-calorie products from Pepsi. Additionally, Coca-Cola’s market share is likely to grow
since Pepsi is no longer a factor in schools all over the world. However, it faces the risk of growing a
negative public reputation that it cares more about making money than looking out for children’s
health.
3. How would you respond to Coca-Cola’s change in sales policy? How would you ensure Pepsi’s
board that this response will allow you to remain competitive and profitable?
The text defines a “response” as a countermove, prompted by a rival’s attack that is designed to
defend or improve a company’s market share or profit. The two methods of responding are to either
mirror the rival moves or to respond along a different dimension. Thus, students’ responses should
be formed along one of those two choices—either Pepsi backtracks on its decision and decides to
start selling in schools again, or it finds a new way to make up for lost sales and revenues.
Management Team Decision
Purpose
In this case, students are asked to decide how what a global company should do to increase its sales in a
foreign market. The most cost effective way to do global business is to sell the same product line in all of
the different markets. This approach, however, can be risky, since different consumers in different
markets may not be attracted to the same products.
Setting It Up
A creative way to introduce this case to students would be to show them pictures of various products sold
in other countries. Examples might include food products or clothing that are generally unknown to
American consumers. After showing them the pictures, ask students “What would a company have to do
to get you to buy these products?”
A New Strategy for India?
During the most recent management meeting at Nokia’s Asian headquarters, you heard about a small
company called Micromax that is one of the fastest-growing cell phone companies in India. The company
started as a pay phone provider but quickly branched into mobile phones. In just a few short years, it’s
been able to sell 1 million handsets per year, grabbing 4 percent of the Indian market. And much of this
growth is coming at Nokia’s expense, which has seen its market share in India dip from 64 percent to 52
percent.
One of the keys to Micromax’s success has been its strategy of creating phones that cater specifically to
the Indian market. Its first phone, which featured a small screen and a huge battery and could run for five
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days, was inspired when Micromax executives saw a long line of people waiting to use a man’s car
battery to charge their cell phones. A popular current model is inspired by Bollywood films and features
ornate costume jewelry. One of the reasons that Micromax is so popular is that most of its handsets allow
consumers to access multiple accounts, either by hosting two phone numbers or allowing for very easy
switching of SIM cards (small cards that identify a particular user on the network). And because these
phones are targeted toward a market where Internet and 3G coverage is still sporadic, most of
Micromax’s phones lack Wi-Fi, 3G, or GPS, features that are critical to a phone’s success in the United
States or Europe.
All of this runs counter to Nokia’s strategy, which has been to make phones for a worldwide market,
meaning that it sells what is basically the same phone in Midland, Texas, as in Mumbai, and to emphasize
the quality of its products. In fact, each phone spends 18 months in development, as it is tested for quality
and durability.
But as your market share in the rapidly growing Indian market continues to spiral downward, some in the
company wonder if maybe a change in strategy is needed. Instead of offering high-priced, high-tech
phones that are similar to what it sells in the rest of the world, they wonder whether the company
shouldn’t try to duplicate what Micromax is doing and sell phones that are more suited to Indian
consumer tastes.
Form a group with three or four other students, and discuss how you would approach this issue as Nokia’s
management team by answering the following questions.
Source:
Mehul Srivastava, “India’s Mobile Phone Hitmaker,” Bloomberg Businessweek, August 12, 2010, accessed January 19, 2015,
from www.businessweek.com/magazine/content/10_34/b4192036523358.htm.
Questions:
1. What do you think would be more effective strategy for Nokia to respond to Micromax—
differentiate itself from Micromax or replicate what it is doing?
Students’ responses will vary. Nokia should probably change its strategy and try to work on its
weaknesses. It should grab available opportunities (Micromax’s phones lack Wi-Fi, 3G, or GPS) and
build on its strengths because Micromax appears as a threat to their company.
2. How could a shadow strategy task force help Nokia identify the best way to proceed?
A shadow-strategy task force actively seeks out its own company’s weaknesses and then, thinking
like a competitor, determines how other companies could exploit them for competitive advantage. If
Nokia were to use this approach, it would take a very critical look at its product line and, rather than
trying to accentuate the positives, look for any negatives that might turn potential consumers away.
By analyzing the negatives, Nokia would get a better understanding of why it is failing and what
steps it could take to turn things around.
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3. What positioning strategy should Nokia use to gain an advantage against Micromax and other
competitors?
Students’ responses will vary, but they should choose one of the three positioning strategies in the
text and discuss why it is the best option for Nokia’s efforts in India. There are three positioning
strategies: cost leadership, differentiation, and focus. Cost leadership means producing a product or
service of acceptable quality at consistently lower production costs than competitors so that the firm
can offer the product or service at the lowest price in the industry. It should be noted, however, that
Micromax and other competitors already have extremely low price points, which means that there
may be little room for Nokia to cut prices without risking its margin. Differentiation means making
your product or service sufficiently different from competitors’ offerings so that customers are
willing to pay a premium price for the extra value or performance that it provides. Again, this
approach is difficult because a key part of Micromax’s success is its ability to understand and deliver
what Indian consumers want. With a focus strategy, a company uses either cost leadership or
differentiation to produce a specialized product or service for a limited, specially targeted group of
customers in a particular geographic region or market segment. Taking this approach, Nokia would
try to reach only a limited segment of the consumer base, perhaps businessmen or executives who
need smartphone capabilities that other competitors don’t offer. Again, though, this approach is risky
because it makes little effort to reach a broader consumer base.
Practice Being a Manager
Most Likely To Succeed
Organizational strategy is aimed at achieving sustainable competitive advantage over rivals in a particular
market. This exercise will offer you the opportunity to consider how companies in the restaurant industry
might develop a strategy and attempt to gain sustainable competitive advantage. For purposes of this
exercise, the instructor will organize the class into small teams. Each team will be competing for the title
of “Most Likely to Succeed.” One team will be designated as judges for this competition.
Step 1 (15 minutes): Develop a concept for a new restaurant business. Students may choose to
develop their concept as a local, regional, or national company—but in all cases, they must plan to open a
restaurant in their local area. Their concept should include the following: (a) name for the
restaurant/chain; (b) description of the menu, layout, and any other distinguishing features; and (c) likely
direct competitors of their new concept. Prepare an informal presentation of not more than two minutes.
Step 2 (20 minutes): Present the concepts. Each team will make an informal two-minute presentation of
the restaurant concepts.
Step 3 (5 minutes): Judge the presentations. Judges will confer and reach a decision regarding the top
concepts on the basis of “Most Likely to Succeed.” Judges should apply the sustainable competitive
advantage concept/factors in making their selections. While the judges are conferring, each team should
discuss and evaluate the concepts presented by the competing teams. Teams should apply the tools and
concepts in this chapter in evaluating these concepts.
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Step 4: Discuss as a class.
Instructors can initiate a class discussion based on the following points:

 What are the challenges of achieving sustainable competitive advantage in the restaurant business?
Consider cases of failure and success in their local market—what factors seemed to play a role in
determining success or failure?
 What strategic groups, or clusters of direct competitors (for example, fast-food burgers), were
identified in the team presentations? Which strategic groups might be tougher to enter in their local
area? Which might be easier to enter?
 Do major restaurant chains have a built-in sustainable competitive advantage over local
competition in the area? If so, what is the source of this advantage, and is it more pronounced in
some strategic groups than in others (e.g., greater in tacos than in fine dining)? If not, what
strategies have the locals used to successfully compete with larger restaurant chains?
Teaching Notes––Practice Being a Manager
Exercise Overview and Objective
The objective of this exercise is to apply the concepts of sustainable competitive advantage and strategic
groups in a setting familiar to students—the local restaurant market. Student work groups will each
develop a restaurant concept (name; description of menu, layout, and any other distinguishing features;
and likely direct competitors with their new concept). A judging team will listen to brief concept
presentations by each work group and select the concept(s) most likely to succeed. The class will then
debrief on the topics of sustainable competitive advantage and strategic groups.
Preparation
This exercise will work best if students are encouraged to give some attention to the local restaurant
market in advance of conducting the exercise. Instructors may stimulate such attention a session or two
before conducting the exercise by asking students to consider the following three items:
 Are students aware of any restaurants in their (local) market that have failed/closed over the past
few years? If so, why do they think that these restaurants failed/closed?
 What restaurants are highly successful in their (local) market? What factors do they think account
for the success? Have any of these restaurants been successful for more than five (5) years?
 Pick two local restaurants that are quite different from one another in terms of menu, pricing,
and/or atmosphere. Try to identify the direct competitors (strategic group) for each of these
restaurants.
These three items should help students begin to think about factors that might play a role in determining
competitive success (sustainable competitive advantage) or failure. The last bulleted item should help
students to begin to see strategic groups within the local restaurant market.
If instructors would like to use more informal preparation, they might simply ask students to think about
what factors might determine success or failure in their local restaurant market, and what type of
restaurant they might open if they wished to enter this market.
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Whether instructors assign questions or use a more informal approach to student preparation for this
exercise, he/she should announce that the exercise will involve competition among teams and that
studying their local restaurant market (i.e., preparation questions above) will help their teams to perform
well in the competition. Instructors should NOT announce the aim of the contest in advance (e.g.,
developing a restaurant concept), as this may short-circuit student exploration of restaurant market
dynamics. Announcing the purpose of the competition in advance may also make it more difficult to
control for outside help and other fairness concerns.
If instructors assign teams at the opening of the session in which they conduct the exercise, they may
want to remind students to keep their ideas to themselves until they are assigned to teams. If instructors
choose to assign teams in advance of the exercise, then students should be encouraged to work as a team
to research the local restaurant market.
In-Class Use
Instructors may use convenient groupings (e.g., project groups) for this exercise or simply assign students
randomly to groups of 3 or 4 students. The exercise instructions assume that 10 teams will present their
concepts. At 2 minutes each, the presentations require 20 minutes. If the instructors are conducting this
exercise in a 50-minute session, they will probably want to adjust team sizes so that no more than 10
teams are participating. At the upward bound of 10 teams, only 10 minutes would be available for
debriefing at the end of the session. This exercise may be used to open a multiple-session discussion of
strategy, in which case instructors might continue to debrief and discuss the exercise in subsequent class
sessions.
At the opening of the session, they should be prepared with team assignments and with the selection of
Judges (one of the teams). The Judges will listen to the team presentations and select those most likely to
succeed. Teams should be assigned and their work initiated as quickly as possible after the start of the
class session.
While the competing teams are developing their concepts (Step 1), instructors should give the Judges their
instructions. Inform Judges to listen carefully to each team’s presentation, and to evaluate them on the
basis of the likelihood that the team’s concept will result in sustainable competitive advantage. Some
factors to consider:
 Market knowledge—to what degree does the team demonstrate that they have given thoughtful
consideration to the key success factors in the local restaurant market? Do they accurately describe
the market?
 Strength of Concept—to what degree has the team persuasively made the case for their concept?
How likely is it that this concept will achieve sustainable competitive advantage?
 Competitive Awareness—has the team accurately identified likely direct competitors? To what
degree has the team effectively demonstrated awareness of strategic groups in the market?
Judges should take notes and then confer briefly at the end of the team presentations. Instructors may
want to use 1st through 3rd places, with some associated prize. In the event of a deadlock among the
Judges, the instructor should cast a tiebreaker vote.
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Quickly announce winners and (optional) award prizes and then move directly to the debriefing.
Debriefing questions are provided in Step 4 of the exercise. The overarching aim of the
debriefing/discussion is to help students see the application of strategy concepts such as sustainable
competitive advantage and strategic groups to a market with which they have some familiarity.
Develop Your Career Potential
Purpose
To allow students to practice the SWOT analysis technique in a contextually relevant way.
Setting It Up
Because this is a very personal exercise, it will probably not be a good in-class exercise. Students will
probably have more success if this is done as a take-home assignment. In order to prepare students for the
activity, the instructor will want to review Section 6.2b on SWOT analysis. It may be helpful to do an in-
class warm up, asking students to identify the elements of a SWOT analysis, the purpose of such an
analysis, and to envision how the situational analysis can apply to them personally.
After the assignment has been completed, the instructor may wish to poll the class on how they found the
activity (difficult, challenging, probing, thought provoking, etc.) and how they think the exercise can help
them as they work toward their degrees and in their careers.
An Individual SWOT Analysis
In order to maintain and sustain a competitive advantage, companies continue to analyze their overall
strategy in light of their current situation. In doing so, they often use a SWOT analysis, which focuses on
the strengths and weaknesses in the firm’s internal environment and the opportunities and threats present
in the firm’s external environment. One way to gain experience in conducting a SWOT analysis is to
perform one on themselves—in other words, conduct a personal SWOT analysis. Assume students have
just completed their college education and are ready to apply for a job as a manager of a small- to
medium-sized facility. Perform a personal SWOT analysis to determine if their current situation matches
their overall strategy. Identifying their strengths will probably be the easiest step in the analysis. They will
most likely be the skills, abilities, experience, and knowledge that help differentiate them from their
competitors. Take care to be realistic and honest in analyzing strengths and weaknesses. One way to
identify both strengths and weaknesses is to look at previous job evaluation comments and talk to former
and present employers and coworkers. Their comments will typically focus on objective strengths and
weaknesses that they have exhibited on the job. Students may also gather information about their
strengths and weaknesses by analyzing their personal interests and learning more about their personality
type. Most college placement offices have software to help students identify their interests and personality
types and then match that information to certain career paths. This type of assessment can help ensure that
students do not choose a career path that is incongruent with their personality and interests.
Probably the hardest portion of the personal SWOT analysis will be the identification of their weaknesses.
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As humans, people are often reluctant to focus on their deficiencies; nonetheless, being aware of potential
weaknesses can help reduce them or improve upon them. Since an individual is preparing for a career in
management, he/she should research what skills, abilities, knowledge, and experience are needed to be a
successful manager. Comparing personal strengths against those needed as a manager can help identify
potential weaknesses. Once the weaknesses are identified, develop a plan to overcome them. Remember
that most annual evaluations will include both strengths and weaknesses, so don’t forget to include them
in the analysis.
Students can identify opportunities now by looking at employment possibilities for entry-level managers.
In this part of the analysis, it helps to match their personal strengths with opportunities. For example, if
they have experience in manufacturing, they may initially choose to apply only to manufacturing-type
businesses. The last step of the analysis involves identifying potential threats. Threats are barriers that can
prevent people from obtaining their goals. Threats may include events such as an economic recession that
reduces the number of job openings for entry-level managers. By knowing what the barriers are and by
assembling proactive plans to help deal with them, individuals can reduce the possibility of their strategy
becoming ineffective. Focusing on a personal SWOT analysis can be a practical way to prepare for an
actual company analysis, and it also allows students to learn more about themselves and their long-term
plans.
Source:
P. Buhler, “Managing Your Career: No Longer Your Company’s Responsibility,” Supervision, May 1997.
Questions:
1. In light of the SWOT analysis, what plans might you propose for yourself that will help you
maximize your strengths, exploit your opportunities, and minimize your weaknesses and threats?
Write three S.M.A.R.T. goals (remember Chapter 5) that will help you implement your plans.
2. How might this assignment prepare you for both your academic and your professional career?
Management Workplace
Management Workplace videos can support several in-class uses. In most cases instructors can build an
entire 50-minute class around them. Alternatively, they can provide a springboard into a group lesson
plan.
Video: Profile on Theo Chocolate
Strategy Formulation and Execution
Summary:
When Theo Chocolate first started its production, the company offered an exotic line of dark chocolate
and milk chocolate bars and truffles. These early treats had unusual names such as the 3400
Phinney Bar, and they were wrapped in artistic watercolor packaging with whimsical cover
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designs. Though the chocolate was well received by critics and organic food enthusiasts, it was
not popular with mainstream consumers. Founder Joe Whinney began working on a new strategy,
creating classic milk chocolate bars as a gateway product that would attract consumers more
easily. The end result is that Theo now offers two distinct product lines for two different market
segments—the Classic line of milk chocolate bars for mainstream customers, and Fantasy Flavors
for more adventurous eaters.
Ask your students:
1. Evaluate Theo’s new strategy in light of the company’s strengths, weaknesses, opportunities, and
threats.
A SWOT analysis for Theo Chocolate begins by recognizing that Theo has a mission to be the most
loved and most ethical chocolate company in the world. Internal strengths that help the company
achieve its mission and goals include the company’s expertise in chocolate making, knowledge of
sustainable business practices, and control over much of its supply chain. Whinney observed,
however, that the company’s exotic product line was too unusual for mainstream markets—a major
barrier to becoming the world’s most loved chocolate company. As Whinney examined the external
environment for opportunities, they noted that the mainstream candy market was lacking a traditional
chocolate bar that could claim to have green benefits. This general analysis is what lead Theo to
come up with a new strategy to launch a product line that would appeal mainstream candy customers
yet offer unique environmental benefits.
2. Using the BCG Matrix, explain Theo’s decision to offer a classic line of chocolate bars after having
limited success with Fantasy Flavor chocolates.
Theo began as an organic chocolate maker with an exotic product line that appealed to Fair Trade
consumers and sophisticated chocolate lovers. As creative as Theo’s products were, they weren’t
generating high volume sales. On the BCG Matrix, Theo’s original business represents a question
mark—a risky business unit with small market share in a fast growing organic foods marketplace.
However, managers eventually decided that they wanted a product line that could become a cash
cow, and so Theo began making traditional milk chocolate candy bars with familiar flavors. Theo’s
Classic product line is situated in a mature slow-growth market and is positioned to challenge the
market share of large well-known chocolate companies. According to founder Joe Whinney, Theo
will continue to operate its original question mark business unit in hopes that it will become a star (a
business unit with large market share in a fast growing organic foods industry). However, it remains
to be seen whether Theo will end up as a traditional chocolate maker competing in a large slow-
growth confectionary industry, as a green pioneer with high market share in a fast-growth organic
foods industry.
3. Which of the three competitive strategies—differentiation, cost leadership, or focus—do you think is
right for Theo Chocolate? Explain.
Students’ answers will vary, but students should recognize that Theo is banking on its organic and
Fair Trade expertise to differentiate itself from other chocolate makers and brands (differentiation
strategy). As a small company, Theo cannot offer better prices than those offered by large chocolate
26
companies—so a cost leadership strategy is not an option. And while the company seems well suited
for a focus strategy—the company is a hit with green consumers in the Pacific Northwest—founder
Joe Whinney is not satisfied with a narrow target market. He hopes to share his chocolate with
mainstream chocolate consumers.
Workplace Video Quiz
Video Segment 1
Video segment title Strategy Formulation and Implementation

Start time (in sec) 0:00
Stop time (in sec) 2:13
Quiz Question 1 Which of the following statements from the clip best describes Theo
Chocolate’s early approach to formulating a business strategy?
Option a “We work with a distribution system in grocery”
Option b “We produced products that really excited us, and we put them in
packaging we really liked”
Option c “Joe convinced me I should start this company with him”
Option d None of these
Correct option b: “We produced products that really excited us, and we put them in
packaging we really liked”
Feedback for option a
Feedback for option b Correct. Theo Chocolate began with a desire and plan to make products
that the owners were interested in producing.
Feedback for option c Incorrect. Theo Chocolate began with a desire and plan to make products
Feedback for option d Incorrect. Theo Chocolate began with a desire and plan to make products
Quiz Question 2
Option a The strategy failed to align with the wants and demands of mainstream
consumers
Option b The strategy failed to excite and motivate employees
Option c The strategy aimed to distribute chocolate bars to grocery stores
Option d The strategy wasn’t written down
Correct option a: The strategy failed to align with the wants and demands of mainstream
consumers
Feedback for option a Correct. The company’s products were lauded by critics, but few
mainstream consumers found them appealing.
Feedback for option b Incorrect. The company’s products were lauded by critics, but few
Feedback for option c Incorrect. The company’s products were lauded by critics, but few
Feedback for option d Incorrect. The company’s products were lauded by critics, but few
27
Quiz Question 3 Leaders at Theo Chocolate took the right steps to fix their misdirected
strategy when they:
Option a Decided to enter the confectionary industry
Option b Resolved to have an ethical business model
Option c Reevaluated Theo’s internal strengths and weakness and searched for
profitable opportunities in the marketplace
Option d Moved to Seattle
Correct option c: Reevaluated Theo’s internal strengths and weakness and searched for
profitable opportunities in the marketplace
Feedback for option a Incorrect. The company conducted a situational analysis to determine how
it needed to change.
Feedback for option b Incorrect. The company conducted a situational analysis to determine how
Feedback for option c Correct. The company conducted a situational analysis to determine how it
needed to change.
Feedback for option d Incorrect. The company conducted a situational analysis to determine how
Video Segment 2

Quiz Question 1 To make their company’s strategy more effective and profitable, managers
at Theo Chocolate had to do all the following except:
Option a Lower the price of candy bars
Option b Wrap chocolate bars in less exotic packaging
Option c Produce chocolate flavors that appeal to mainstream candy eaters
Option d Inform the public of the company’s organic standards
Correct option d: Inform the public of the company’s organic standards
Feedback for option a Incorrect. The public already knew about the company’s standards, but did
not find the chocolates appealing.
Feedback for option b Incorrect. The public already knew about the company’s standards, but did
Feedback for option c Incorrect. The public already knew about the company’s standards, but did
Feedback for option d Correct. The public already knew about the company’s standards, but did
Quiz Question 2 Theo Chocolate’s companywide decision to abandon its niche-oriented

business model and instead pursue mainstream customers and high volume
sales is consistent with this grand strategy:
28
Option a Stability strategy

Option b Growth strategy
Option c Retrenchment strategy
Option d All of these
Correct option b: Growth strategy
Feedback for option a Incorrect. A growth strategy is intended to increase profits, revenues,
market share, or the number of places in which a company does business.
Feedback for option b Correct. A growth strategy is intended to increase profits, revenues, market
share, or the number of places in which a company does business.
Feedback for option c Incorrect. A growth strategy is intended to increase profits, revenues,
Feedback for option d Incorrect. A growth strategy is intended to increase profits, revenues,
Quiz Question 3 Theo Chocolate’s decision to revise its strategy around more familiar
mainstream chocolate bars has the following drawback:
Option a The change weakens the company’s ability to differentiate itself from other
chocolate companies
Option b Theo will have difficulty matching the low prices of chocolate bars mass
produced by the leading brands
Option c The company may lose its diehard fans in Seattle and the surrounding
region
Correct option d: All of these
Feedback for option a Incorrect. The company’s decision to follow more mainstream competitors
reduces its uniqueness and may potentially reduce its competitive
advantages.
Feedback for option b Incorrect. The company’s decision to follow more mainstream competitors
advantages.
Feedback for option c Incorrect. The company’s decision to follow more mainstream competitors
advantages.
Feedback for option d Correct. The company’s decision to follow more mainstream competitors
advantages.
Video Segment 3

Quiz Question 1 What is Theo Chocolate’s competitive advantage within the chocolate
industry?
29
Option a The company’s chocolate bars come in multiple flavors

Option b The company has expertise in manufacturing chocolate
Option c The company has expertise in manufacturing organic fair trade chocolate
Correct option c: The company has expertise in manufacturing organic fair trade
chocolate
Feedback for option a Incorrect. Theo Chocolate was the first American chocolate company to be
fair-trade certified.
Feedback for option b Incorrect. Theo Chocolate was the first American chocolate company to be
Feedback for option c Correct. Theo Chocolate was the first American chocolate company to be
Feedback for option d Incorrect. Theo Chocolate was the first American chocolate company to be
Quiz Question 2 A potential ongoing weakness of Theo Chocolate’s business strategy is:
Option a Not enough consumers like chocolate
Option b The company has control over its factory and entire supply chain
Option c The organic fair trade concept at the core of Theo’s mission doesn’t excite
the average mainstream chocolate consumer
Option d The company’s organic fair trade standards are likely to be criticized by
environmental special interest groups
Correct option c: The organic fair trade concept at the core of Theo’s mission doesn’t
excite the average mainstream chocolate consumer
Feedback for option a Incorrect. Mainstream consumers did not find much appeal in buying fair
trade chocolate.
Feedback for option b Incorrect. Mainstream consumers did not find much appeal in buying fair
trade chocolate.
Feedback for option c Correct. Mainstream consumers did not find much appeal in buying fair
trade chocolate.
Feedback for option d Incorrect. Mainstream consumers did not find much appeal in buying fair
trade chocolate.
Quiz Question 3 Which of the following strategy assessment tools would not apply to a
small company like Theo Chocolate, which has a single division and only a
few chocolate bar products?
Option a SWOT analysis
Option b Porter’s Five Competitive Forces
Option c Porter’s generic strategies (differentiation, cost leadership, focus)
Option d BCG matrix
Correct option d: BCG matrix
Feedback for option a Incorrect. The BCG matrix is a portfolio strategy that categorizes a
corporation’s business by growth rate and relative market share.
Feedback for option b Incorrect. The BCG matrix is a portfolio strategy that categorizes a
30
Feedback for option c Incorrect. The BCG matrix is a portfolio strategy that categorizes a
Feedback for option d Correct. The BCG matrix is a portfolio strategy that categorizes a
Video Segment 4

Quiz Question 1 Which of the following hypothetical new-product ideas would fit a “related
diversification” strategy that Theo could use to expand its business?
Option a Launch a line of Theo Chocolate women’s fragrances
Option b Create a line of educational videos about sustainable, fair trade
manufacturing processes
Option c Sell Theo Chocolate branded cookware
Correct option b: Create a line of educational videos about sustainable, fair trade
manufacturing processes
Feedback for option a Incorrect. In related diversification, business units share similar products,
manufacturing, marketing, technology, or cultures.
Feedback for option b Correct. In related diversification, business units share similar products,
Feedback for option c Incorrect. In related diversification, business units share similar products,
Feedback for option d Incorrect. In related diversification, business units share similar products,
Quiz Question 2 In the segment, Vice President Debra Music discusses Theo Chocolate’s
marketing department activities, including factory tours, chocolate
sampling, and brand ambassadors that help the company set itself apart
from competitors. Strategies planned and executed at this level of the
organization are called:
Option a Corporate-level strategy
Option b Industry-level strategy
Option c Local-level strategy
Option d Global-level strategy
Correct option b: Industry-level strategy
Feedback for option a Incorrect. Industry-level strategy addresses the question “How should we
complete in this industry?”
Feedback for option b Correct. Industry-level strategy addresses the question “How should we
Feedback for option c Incorrect. Industry-level strategy addresses the question “How should we
31
Feedback for option d Incorrect. Industry-level strategy addresses the question “How should we
Quiz Question 3 Theo Chocolate differentiates its products from competitors by:
Option a Offering factory tours
Option b Offering fair trade, organic products
Option c Offering domestically grown products
Option d Offering free product samples
Correct option b: offering fair trade, organic products
Feedback for option a Incorrect. Differentiation is when a company makes a product or offers a
service that is sufficiently different from a competitor’s offerings.
Feedback for option b Correct. Differentiation is when a company makes a product or offers a
Feedback for option c Incorrect. Differentiation is when a company makes a product or offers a
Feedback for option d Incorrect. Differentiation is when a company makes a product or offers a
Review Questions
1. Identify the components of a sustainable competitive advantage.
A competitive advantage is the advantage that a firm has when it uses its resources to provide greater
value to the customer than its competitors can. The components of a sustainable competitive
advantage are valuable resources, rare resources, imperfectly imitable resources, and non-
substitutable resources.
2. Outline steps of the strategy-making process.
The strategy-making process has three steps:

 Assess the need for strategic change: Managers must determine if strategic change within the
organization is needed based on what is happening in the business environment.
 Conduct a situational analysis: A situational analysis might include a SWOT analysis, or an
assessment of the organization’s strengths, weaknesses, opportunities, and threats. The
analysis of the strengths and weaknesses represent an internal analysis, while the analysis of
opportunities and threats requires external environmental scanning.
 Choose strategic alternatives: Based on the situational analysis, managers will determine what
strategies to follow to successfully achieve goals and objectives.
3. What is a corporate-level strategy? Describe the major approaches to corporate-level strategy.
A corporate-level strategy is the overall organizational strategy that addresses the question: “What
business or businesses are we in or should we be in?” Two kinds of corporate-level strategies are:
 Portfolio strategy: A corporate-level strategy that minimizes risk by diversifying investment
among various businesses or product lines.
32
 Grand strategy: A broad corporate-level strategic plan used to achieve strategic goals and
guide the strategic alternatives that managers of individual businesses or subunits may use.
These strategies include growth, retrenchment/recovery, and stability.
4. What are the elements of the BCG matrix?
The BCG (Boston Consulting Group) matrix is a type of portfolio strategy that managers can use to
categorize their products by growth and market share. The four categories of products are:
 Star: A product with a large share of a fast-growing market. Stars would receive a
disproportionately large percentage of resources due to their future promise.
 Question mark: A product with a small share of a fast-growing market. The amount of
resources given to question marks would depend on how much promise they have for the
future.
 Cash cow: A product with a large share of a slow-growing market. Cash cows generate a lot of
profit, which can be reinvested back into the cash cows or given to the stars. Managers
generally invest enough in cash cows to keep them top-of-mind to the consumer.
 Dog: A product with a small share of a slow-growing market. Dogs generally receive few
resources due to their limited growth and profit potential.
5. Identify three grand strategies and give examples of each.
The three kinds of grand strategies are:

 Growth strategy: A strategy that focuses on increasing profits, revenues, market share, or the
number of places in which the company does business.
 Stability strategy: A strategy that focuses on improving the way in which the company sells
the same products or services to the same customers.
 Retrenchment strategy: A strategy that focuses on turning around very poor company
performance by shrinking the size or scope of the business. Recovery consists of the strategic
actions taken after retrenchment to return to a growth strategy.
6. What is an industry-level strategy? What tools can companies use to develop successful industry-level
strategies?
An industry-level strategy is a corporate strategy that addresses the question, “How should we
compete in this industry?” Before determining a proper strategy, a company should first examine the
five forces that determine the overall level of competitiveness in their industry.
 Michael Porter’s five industry forces include the analysis of the character of rivalry, the threat
of new entrants, the threat of substitute products, the bargaining power of buyers, and the
bargaining power of suppliers.
Depending on the results of the analysis, a company can choose between two types of industry-level
strategies:
 Positioning strategies: Three types of positioning strategies are cost leadership,
differentiation, and focus.
 Adaptive strategies: Strategies that are best suited to changes in the organization’s external
33
environment, such as defending, prospecting, analyzing, and reacting.
7. What are Porter’s five industry forces and how do they affect a company’s strategy?
Porter’s five industry forces determine an industry’s overall attractiveness to corporate investors and
its potential for long-term profitability. Together, a high level of new entrants, substitute products or
services, bargaining power of suppliers, bargaining power of buyers, and rivalry between
competitors combine to increase competition and decrease profits. The stronger these forces, the less
attractive the industry becomes to corporate investors because it is more difficult for companies to be
profitable.
8. What is a firm-level strategy?
A firm-level strategy addresses the question, “How should we compete against a particular firm?”
Three types of firm-level strategies are:
 Direct competition: The relationship between two companies offering similar products and
services that acknowledge each other as rivals and take offensive and defensive positions as
they act and react to teach other’s strategic actions.
 Beyond the Book: Entrepreneurship and intrapreneurship: Entrepreneurship occurs when a
new firm enters new or established markets with new goods or services. Intrapreneurship
occurs when an existing firm enters new or established markets with new goods or services.
9. What are the basic elements of direct competition?
Market commonality and resource similarity determine whether firms are in direct competition and
thus likely to attack each other or respond to each other’s attacks. In general, the more markets in
which there is product, service, or customer overlap, and the greater the resource similarity between
two firms, the more intense the direct competition between them. When firms are direct competitors
in a large number of markets, attacks are less likely because responding firms are highly motivated to
quickly and forcefully defend their profits and market share. Resource similarity also affects
response capability, meaning how quickly and forcefully a company responds to an attack. When
resource similarity is strong, attacks are much less likely to produce a sustained advantage because
the responding firm is capable of striking back with equal force.
Market entries and exits are the most important kinds of attacks and responses. Entering a new
market is a clear offensive signal, while exiting a market is a clear signal that a company is
retreating. Market entry is perhaps the most forceful attack or response because it sends the clear
signal that the company is committed to gaining or defending market share and profits at a direct
competitor’s expense. In general, attackers and early responders gain market share and profits at the
expense of late responders. Attacks must be carefully planned and carried out, however, because they
can provoke harsh retaliatory responses.
10. Beyond the Book: How do companies implement entrepreneurship as an internal strategy?
Entrepreneurship is entering new or established markets with new goods or services. The five key
34
dimensions of entrepreneurship are: autonomy, innovativeness, risk-taking, proactiveness, and

competitive aggressiveness. In general, we tend to think of entrepreneurship as business startups, but
established firms can also be entrepreneurial simply by incorporating the elements of
entrepreneurship into their management practices. When an established company develops new
goods or services using those dimensions, it is called intrapreneurship.
Group Activity
Industry Analysis
Divide the class into small groups. Each group should select a company that participates in an industry
that has at least three other competitors. Groups should (1) identify the strategic group in which the
company participates; (2) conduct analyses of the five industry forces, (3) determine which company uses
which positioning strategy; and (4) determine which company uses which adaptive strategy. The groups
should present their findings to the class.
Assignment
Ask students to do some basic research about Kodak, a company that faces an uncertain future due to the
ubiquitous nature of digital photography. Ask students to assess the company’s strengths, weaknesses,
opportunities, and threats given the rapid changes in the digital age.
Large Section
Assign the electronic case homework and quiz on The Walt Disney Company.
Additional Resources
In-Class Activity: “S.W.O.T.” Divide the class into small groups (around 4 students). Give each group a
different organization and have them conduct a SWOT analysis of the company, considering its internal
and external environment. Some examples of organizations would be an airline (such as Southwest), a
movie studio, a university or college, a video-game manufacturer, and a carmaker.
Portfolio Matrix. Go to HBO’s website at http://www.hbo.com. Listed are the television series, movies,
documentaries, and other channels that HBO owns. Read about a few of these channels and then put
together a portfolio analysis using the BCG matrix. What type of strategy would students use for each
product?
Entrepreneurial Orientation. Direct students to go to Hewlett-Packard’s company information site at

http://www8.hp.com/us/en/hp-information/index.html. Ask them to find evidence of each of the five
characteristics of entrepreneurship: (1) autonomy, (2) innovativeness, (3) risk taking, (4) proactiveness,
and (5) competitive aggressiveness.
Positioning Strategies. Go to the website of C.L.I.A. (Cruise Lines International Association), at
35
http://www.cruising.org. This official association of the cruise line industry provides brief descriptions
of the major cruise lines of the world. Look up ten well-known cruise lines and determine what kind of
positioning strategy it uses: cost leadership, differentiation, or focus. Describe in detail exactly what each
cruise line does that leads students to determine which strategy it uses.

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1

Chapter 6: Organizational Strategy

Solution Manual for MGMT 9th Edition Williams

 Lesson Plan for Lecture (for large sections)

Highlighted Assignments Key Points

Self-Assessment Students assess how comfortable they are competing and

being in competitive environments.

Management Workplace Though Theo Chocolates’ products were well-received by

6.2 Describe the steps involved in the strategy-making process.

6.3 Explain the different kinds of corporate-level strategies.

6.4 Describe the different kinds of industry-level strategies.

four kinds of adaptive strategies: defenders, prospectors, analyzers, and reactors.

6.5 Explain the components and kinds of firm-level strategies.

Focus strategy Threat of new entrants

Lesson Plan for Lecture (for large sections)

 Review the chapter and determine what  Bring the book.

Topics PowerPoint Slides Activities

6.1 Sustainable 1: Organizational Strategy Ask students to respond to

6.2 Strategy-Making 5: Steps of the Strategy- Use the college’s sports

6.3 Corporate-Level 8: Corporate-Level

6.4 Industry-Level 10: Industry-Level The adaptive strategy of

6.5 Firm-Level 15: Components of Firm- Managers often visit

Summary 17: Summary

Key Terms 18: Key Terms

Remind students about any upcoming events.

Lesson Plan for Group Work (for smaller classes)

 Review the material to cover and modify  Bring the book.

Content Lecture on Sustainable Competitive Advantage (Section 6.1).

“iPod Advantage/Sirius Advantage”

Lecture on the Strategy-Making Process (Section 6.2).

Break for group activity:

Segue into a lecture on Corporate-Level Strategies––Portfolio Strategy (Section 6.3a).

Break for the following activity:

“Framework for Direct Competition”

Remind students about any upcoming events.

Assignments with Teaching Tips and Solutions

What Would You Do? Case Assignment

Walt Disney Company

If you were CEO at Disney, what would you do?

What Really Happened? Solution

Bob Iger took to improve Disney’s competitive position.

strategies: growth, stability, and retrenchment/recovery.

1. I get satisfaction from competing with others.

Interpreting the Score

Here is what your score means.

Dealing with Competition

1. Using Porter’s five industry forces, map the soft-drink industry.

Management Team Decision

A New Strategy for India?

Practice Being a Manager

Most Likely To Succeed

Step 4: Discuss as a class.

Instructors can initiate a class discussion based on the following points:

Teaching Notes––Practice Being a Manager

Exercise Overview and Objective

Develop Your Career Potential

An Individual SWOT Analysis

Video: Profile on Theo Chocolate