Strategic Management in Action 6th

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 CHAPTER 5 FUNCTIONAL AND COMPETITIVE
STRATEGIES
LEARNING OUTCOMES
Use this Learning Outline as you read and study the chapter:

5.1 Describe the functional strategies an organization needs and explain how those strategies are
implemented and evaluated.
5.2 Explain competitive advantage and what it implies.
5.3 Describe the different competitive strategies.
5.4 Discuss how competitive strategies are implemented and evaluated.

TEXT OUTLINE

Active Learning Hint

Hand out an “empty” chapter outline or one with key information missing for the students to use in note
taking. This outline will help the students to organize the information, while keeping the students
actively listening for the information needed to complete the outline.

Strategic Management in Action Case #1: Driving for Success

You may wish to open with a Question and Answer exercise.
• The Toyota vignette illustrates the interrelationships of an organization's functional strategies and
their contributions to the company’s success. Additionally, you may want to review what a learning
organization is and link Toyota's two main principles with their status as a learning organization.
• Questions to connect previous discussion with this chapter:
• What is Toyota’s competitive advantage?
• What is Toyota’s core competency that provides the basis for their competitive advantage?
• What advantages does the Toyota five-day custom car manufacturing system provide for the
marketing department?
• How can this manufacturing pace be sustained? Can't other manufacturers imitate the Toyota
system?

Teaching Notes: _______________________________________________________________________

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LEARNING OUTCOME 5.1 DESCRIBE THE FUNCTIONAL STRATEGIES AN
ORGANIZATION NEEDS, AND EXPLAIN HOW THOSE
STRATEGIES ARE IMPLEMENTED AND EVALUATED

FUNCTIONAL STRATEGIES AND STRATEGIC MANAGEMENT PROCESS

A. Strategic Management in Action: Process (Figure 5.1)
1. Top-level decision makers (i.e., CEO and top management team) develop the overall goal
of what the organization hopes to achieve (i.e., its vision, mission and strategic objectives)
and establish the overall corporate strategies.
2. Functional strategies are developed taking into account the organization’s vision,
mission(s), overall corporate and competitive strategies.
 3. When the organization is first founded, corporate strategies are addressed immediately
where the overall strategic goal(s) and directions are formulated by the CEO and top
management team and then functional strategies are addressed.
4. The vast majority of strategic situations are ones where the organization is not new. In these
situations; functional strategies are looked at first in the process of deciding the most
appropriate strategies—that is, the ones that will lead to a sustainable competitive
advantage.

B. What Happens after the SWOT Analysis?

1. Decision makers have information about the positive and negative aspects of both the
external and internal environments (i.e., Internal [Strengths and Weaknesses] and External
[Opportunities and Threats]).
2. If the organization’s strengths in the various functional units can be exploited as
competitive advantages, particularly in light of any relevant external opportunities, the
organization may well be on its way to achieving high levels of performance.
3. If negative trends are found in any of the organization’s external areas or weaknesses,
changes in functional strategies might be needed to counteract these.
4. Serious functional weaknesses that might be preventing a competitive advantage from being
developed may need to be corrected or minimized.

Active Learning Hint

Conduct a SWOT analysis for Domino’s Pizza and address the issues presented in the Strategic
Management in Action highlight. Divide the class into groups of 4-5 students to work on the SWOT,
and then ask several of the groups to report their findings. Another method would be to divide the class
into 4 groups (or multiples of four). One group identifies the strengths, another group the weaknesses,
etc. Ask each group to report their findings to the class.

Strategic Management in Action: Super Bowl and Pizza

1. Discuss whether to try to meet peak demand – does it lead to loyalty? Is it a weakness if a company
cannot meet demand on that particular day. If you cannot supply your customers you open the door
to rival suppliers and you may lose some to other pizza-makers if you turn them away.
2. A SWOT analysis may reveal if production or delivery capacity are inadequate for the peak demand
or if there may be excess capacity.

C. What Functional Strategies Does an Organization Need?

Functional (or operational) strategies are the short-term, goal-directed decisions and actions
of the organization’s various functional units (Figure 5.2).
All organizations perform three basic functions as they create and deliver goods and services:
1) Product Strategies (design, production-operations, marketing)
2) People Strategies (human resources)
3) Support Process Strategies (information and financial-accounting systems)

1. Functional Strategies – The Product

a). Product design strategies typically involve an organization’s R&D function
b). Once products are ready to be produced, production-operations strategies ensue
c). Next, marketing strategies are implemented

2. Functional Strategies – The People

a). High-performance Work Practices are human resource policies and practices that
lead to both high individual and high organizational performance.
b). Table 5.1 lists some of the high-performance work practices that have been identified.
 These types of HR strategies can:
(1) Improve knowledge, skills and abilities of organization’s current and
potential employees
(2) Increase employees’ motivation
(3) Reduce loafing on the job
(4) Help retain quality employees
(5) Encourage nonperformers to leave the organization
c). Strategic choices include:
i. Getting people into the organization (HR planning, recruiting and staffing)
ii. Making sure they have the knowledge and skills to do their jobs
iii. Helping them do their jobs better (orientation and training)
iv. Assessing how well they do those jobs and making needed corrections
(performance appraisal and disciplinary actions)
v. Motivating high levels of effort and compensating them fairly and
appropriately (compensation and benefits)
vi. Other HR Issues (employee relations, job design, diversity efforts,
workplace safety and health, workplace misbehavior)
vii. An organization’s HR policies reflect its commitment to and treatment of its
employees. Must closely align with those other strategies to assure that the
right numbers of appropriately skilled people are in the right place at the
right time and that the organization’s workforce is being used effectively
and efficiently.

3. Functional Strategies – The Support Process

a). Organizations have two main support processes – information systems and
financial-accounting systems
b). Information affects how effectively and efficiently organizational members can do
their work
c). Two strategic decisions most associated with the organization’s information system
are the choice of system technology and the choice of types of information
systems needed
d). Financial-accounting systems provide strategic decision makers with information
about the organization’s financial transactions, accounts, and standing
e). Strategic choices include:
i. Collecting and using financial and accounting data
ii. Evaluating financial performance
iii. Doing financial forecasting and budgeting
iv. Determining the optimum financing mix
v. Effectively and efficiently managing the financial-accounting functional
area

Strategic Management In Action: Loading the Airplane

• In light of all the delays and flight cancellations the airlines industry experienced in Summer 2007,
have the students discuss some ideas on how the airlines might adopt some production-operations
strategies that might make each airplane’s turnaround at the gate faster.

For Your Information—To Layoff or Not to Layoff

• Student responses may vary based on the students’ life and work experiences and the state of the
United States and global economy.
The Grey Zone – Corporate Blogs
Corporate blogs are popular and legal but not necessarily in the best interests of the company. Should
organizations promote things that are popular but may be harmful or at least may not be beneficial to the
company?
When an employee raises a concern, what are the risks to the organization of responding? Or not
responding? How might stakeholders see it?
What about government regulators or juries? Will they be more sympathetic if you ignore the concerns
of your stakeholders and it turns out that your company’s actions were harmful? What could happen
then?
Do you have to respond to every stakeholder concern?

Strategic Management in Action: Caesars Entertainment

Great service leads to more spending by gamblers. Ask your students if they think that this would hold
true to other businesses outside of the gambling environment? Does great service lead to more spending
in hotels, resorts, restaurants, retail stores, or bars?

Learning Review: Learning Outcome 5.1

• How does the work done in the functional areas support the creation of a competitive
advantage? If the organization’s strengths in the various functional units can be exploited as
competitive advantages, particularly in light of any relevant external opportunities, the
organization may well be on its way to achieving high levels of performance.
• What happens after the SWOT analysis is completed? After completing the SWOT analysis,
decision makers have information about the positive and negative aspects of both the external
and internal environments. The SWOT analysis points to the strategic issues organizational
decision makers need to address in their pursuit of sustainable competitive advantage and high
levels of performance.
• What are the three functional concerns of organizations? The three functional concerns for
organizations are the product, the people, and the support processes.
• What strategies are important to each of those functional concerns? For product, the strategies
are design, production-operations, and marketing. For people, it is HR strategies. And for
support process, it’s strategies related to information systems and financial-accounting systems.
LEARNING OUTCOME 5.2 EXPLAIN WHAT COMPETITIVE ADVANTAGE IS AND
WHAT IT IMPLIES

A. Competitive Advantage
1. Is a key concept of strategic management (getting it and keeping it is what managing
strategically is all about)
2. Sets an organization apart (its competitive edge)
3. Is what an organization’s competitive strategies are designed to exploit
4. Implies that there are other competitors also attempting to develop competitive advantage
and attract customers
5. An organization does something that others can’t do or does it better than others do
(distinctive capability)
6. An organization has something that other competitors don’t (unique resource)
7. Can be eroded easily (and often quickly) by competitors’ actions
B. Understanding the Competitive Environment
1. Competition is everywhere. Most industries and organizations have experienced at some
point.
2. What is Competition?
a) Competition is when organizations battle or vie for some desired object or outcome—
typically customers, market share, survey ranking, or needed resources.

Strategic Management in Action

• Describe situations, outside business and athletics, where competition is taking place.
Answers will vary based on the students and their business and life experiences.

3. Who are Competitors?

Competitors can be described according to:
a) Industry Perspective
(1) Identifies competitors as organizations that are making and selling the same or very
similar good or service.
(2) Describes industries according to the number of sellers and the degree of
differentiation (i.e., similarities or differences of the products or services).
(a) The number of sellers and the level of product-service differentiation will affect
how intensely competitive the industry is.
(b) The most intense competition is “pure competition” where there are many
sellers and no differentiation exists among the sellers.
b) Market Perspective
(1) Competitors are organizations that satisfy the same customer need.
(2) Intensity of competition depends on:
(a) How well the customer’s need is understood or defined
(b) How well different organizations are able to meet that need
c) Strategic Groups Perspective
(1) Recall “current rivalry” in Porter’s Five Forces Model from Chapter 3.
(2) Strategic group is a group of firms competing in an industry that have similar
strategies, resources and customers.
(3) A single industry could have a few or several strategic groups depending on what
strategic factors are important to customers.
(a) Two strategic factors, important to customers, used in grouping competitors are
price and quality.
(b) Important strategic factors, or strategic dimensions, used to determine an
organization’s competitors are different for every industry and can be different
even for different industry segments.
(c) Table 5.2 lists some dimensions that might be used to distinguish strategic
 groups.
(4) The most relevant competitors are those in an organization’s own strategic group.
(5) Level of intensity of competition from this perspective depends on:
(a) How effectively each competitor has developed its competitive advantage
(b) The competitive strategies used by each competitor in the strategic group
(6) Controversy exists over whether or not specific, identifiable strategic groups even
exist.
(a) These questions generally concern:
(1) The factors that are used to define a strategic group
(2) How those factors are chosen and used to separate specific and identifiable
groups

Strategic Management in Action—Hot Sauce

• Ask students how many are familiar with these two brands of hot sauce.
• Ask the students why they choose one sauce over another.
• Ask the students if an ad campaign changes their mind about a product or brand.
• Ask the students what actions a hot sauce manufacturer might take to protect its competitive position.

C. The Role of Resources and Distinctive Capabilities in Gaining Competitive Advantage

Every organization has resources and capabilities to do whatever it’s in business to do.
1. Not every organization is able to:
a) Effectively exploit the resources or capabilities it has
b) Obtain the resources or capabilities it needs but doesn’t have
c) Classic case of “the haves” and “the have-nots” or “the can do’s” and “the can’t do’s”
2. Some organizations “put it all together” and develop distinctive organizational capabilities
that provide a sustainable competitive advantage, others don’t.
3. Organizations will develop strategies to:
a) Exploit their current resources and capabilities
b) Vie for needed-but-not-owned resources and capabilities to pursue and attain desired
outcomes (customers, market share, resources)
c) While other organizations (few to many) are doing exactly the same thing
4. Competitive advantage, by its very nature, implies trying to gain the edge on others.
5. As organizations fight for a sustainable competitive advantage, the stage for competition—
intense, moderate, or mild—is set.

Strategic Management—The Global Perspective: Sukhoi Holding Company

• Ask students to research other aircraft manufacturers.
• How is the Sukhoi Holding Company going to develop a competitive advantage over other aircraft
manufacturers?

D. From Competitive Advantage to Competitive Strategies

Competitive strategy is the way organizations set themselves apart to compete to create a
sustainable competitive advantage
1. The choice of competitive strategy
a) Depends on how an organization or business unit is going to compete in its particular
industry or market
b) Is based on the competitive advantage(s) that the organization has been able to develop
2. Refining and sharpening its sustainable competitive advantage (in unique resources or
distinctive capabilities) provides the basis for an organization’s competitive strategy.

Teaching Notes: _______________________________________________________________________

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Learning Review: Learning Outcome 5.2

• Is competition an issue for all organizations? Discuss.
• Competition is a given for all organizations, regardless of size, type, or geographic location. Even
not-for-profit organizations compete for resources and customers.
• What is competitive advantage?
• Competitive advantage is what sets an organization apart—its competitive edge.
• Compare and contrast the three approaches to defining competitors.
• The industry perspective identifies competitors as organizations that are making the same
product or providing the same service.
▪ The marketing perspective says competitors are organizations that satisfy the same customer
need.
▪ The strategic groups perspective identifies a group of firms competing in an industry that have
similar strategies, resources and customers.
• What role do resources and distinctive capabilities play in gaining competitive advantage?
• Organizations will develop strategies to exploit their current resources and capabilities or to vie
for needed-but-not-owned resources and capabilities to pursue and attain desired outcomes such
as customers, market share and resources. They do this while other organizations (few to many)
are doing exactly the same thing. Competitive advantage, by its very nature, implies trying to gain
the edge on others. As organizations strive for a sustainable competitive advantage, the stage for
competition—intense, moderate, or mild—is set.
• Define competitive strategy. What’s the connection between competitive advantage and competitive
strategy?
• Competitive strategy is the way organizations set themselves apart to create a sustainable
competitive advantage.
• The choice of a competitive strategy is based on the competitive advantage(s) that the
organization has been able to develop.

LEARNING OUTCOME 5.3

DESCRIBE THE DIFFERENT COMPETITIVE STRATEGIES
Although it may seem there are numerous ways an organization competes, the number of
competitive strategies is actually few of possible types of competitive strategies, there are actually a
limited number of ways to describe how an organization competes.
A. Traditional Approaches to Defining Competitive Strategy
1. Miles and Snow’s Adaptive Strategies (1978) (Table 5.3):
a) Based on the strategies organizations use to adapt to their uncertain competitive
environments.
b) Generally been supportive of the appropriateness of these strategies for describing how
organizations are competing.
c) Prospector Strategy
(1) Strategy in which an organization continually innovates by finding and exploiting
new product and market opportunities.
(2) Prospector’s competitive strength is ability to:
(a) Survey a wide range of rapidly changing environmental conditions, trends and
situations to create new products and services to fit this dynamic environment.
(3) Prospector’s competitive strategy is to continually innovate, develop and test new
products and services (i.e., find new directions to pursue).
(4) Constant search for innovation creates uncertainties for prospector’s competitors
who never know what’s going to happen next or what to expect.
(5) If prospector can develop new products or services that the market desires and is
 willing to pay for, it has a competitive advantage.
(6) Examples: Fox Broadcasting Network and MTV known for innovative television
network programming and willingness to pursue new directions based on its ability
to assess environmental trends.

b) Defender Strategy
(1) Strategy used by organizations to protect current market share by emphasizing
existing products and producing only a limited product line.
(2) Defenders have well-established businesses that they’re seeking to defend.
(3) Defender has success with this strategy as long as the primary technology and
narrow product line remain competitive.
(4) Over time, defenders can carve out and maintain niches within their industries that
competitors find difficult to penetrate.
(5) Example: Lincoln Electric of Cleveland, OH; Anheuser-Busch; IBM

c) Analyzer Strategy – strategy of analysis and imitation.

Analyzers
(1) Watch for and copy the successful ideas of prospectors
(2) Compete by following the direction that prospectors pioneer
(3) Thoroughly analyze new business ideas before jumping in
(4) Systematically assess and evaluate whether the move is appropriate for them
(5) Examples: Unilever’s Suave shampoo and skin care products, COSMI Corporation
(education, entertainment and business software)

Strategic Management—The Global Perspective: Pague Menos

• Ask students what they think about the Brazilian retailer copying Wal-Mart’s strategies?
• How successful can Pague Menos be by taking the low cost approach?
• What are the drawbacks to using a low cost strategy? Is it sustainable?
• What is to keep another emerging competitor from copying Pague Menos? What if the new
competitor undercuts Pague Menos’ prices?

d) Reactor Strategy – the lack of a coherent strategic plan or apparent means of

competing.
(1) Reactors:
(a) Simply react to environmental changes and make adjustments only when finally
forced to do so by environmental pressures
(b) Oftentimes unable to respond quickly to perceived environmental changes
because:
(1) They lack the needed resource or capabilities OR
(2) They’re not able to exploit their current resources and capabilities
(2) This is not a recommended competitive strategy for developing a competitive
advantage.
(3) Thought of as a “default” strategy, almost a nonstrategy position.
(4) Without significant strategic changes, a reactor will always be in a weak
competitive position.
(5) Examples: Sears; Sizzler International, Inc.; Digital Equipment Corporation

For Your Information – The Copycat Economy

• Ask the students to evaluate Clorox’s decision to market ReadyMop and determine what strategy is
being used. Was it an offensive or a defensive move on Clorox’s part?
• Ask the students if they can think of any other examples of “copycatting?” In the soft drink business
every new flavor is virtually matched immediately by a competing flavor from a rival. Diet Pepsi and
 Diet Coke have spawned cherry, lemon, lime, and vanilla flavored varieties, as well as C2, a low
carb Coke and Pepsi One a very low calorie add-on to the Diet Pepsi line. The key seems to be to not
allow any competitor an advantage for any length of time. Fast-food makers have done the same
thing with gourmet salads. Wendy’s started the war with a very successful introduction of gourmet
salads and McDonald’s followed with several varieties within months. Automobile financing and
rebates are another example where there is little difference between competitors.
• How did Procter and Gamble respond to Clorox? Rather than cede any advantage to Clorox, P&G
cut its price (and its profit margin) to not be out positioned by a “fast-follower.” Possible responses
range from increased advertising to win customer attention to price cuts that then limit the ability of
new entrants to garner profits…perhaps discouraging their entry before it occurs.
Teaching Notes: _______________________________________________________________________
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2. Porter’s Generic Competitive Strategies (1980)

a) Porter’s approach is based on an organization’s competitive advantage.
b) Competitive advantage can come from only one of two sources:
(1) Having the lowest costs in the industry
(2) Possessing significant and desirable differences from competitors
c) Another important strategic factor is the scope of the product-market in which the
organization wishes to compete—that is, broad (i.e., all or most market segments) or
narrow (i.e., only one segment or a few segments).
d) The mix of these factors provides the basis for Porter’s approach.
e) The term generic simply refers to the fact that these strategies can be pursued by any
type or size organization in any type or size industry.
(1) Cost leadership Strategy (or low-cost strategy) is one in which an organization
strives to have the lowest costs in its industry and produces products for a broad
customer base.
(a) Cost leader
(1) Chooses to compete on the basis of having the lowest costs.
(2) The main goal is to have the lowest (total unit) costs in the industry
(emphasis on costs, not prices).
(a) With the lowest costs in its industry, the cost leader:
(1) Can potentially charge the lowest prices and
(2) Still earn significant profits, even during a price war
(b) Successful pursuit of the cost leadership strategy
(1) Everything the cost leader does—every strategic decision made, every
strategic action taken—is aimed at keeping costs as low as possible.
(2) Efficiency in all areas of operations is the main objective, and all resources,
distinctive capabilities, and functional strategies are directed at that.
(3) The cost leader isn’t going to have deep and wide product lines as
providing these product or service variations is expensive.
(4) ,The cost leader has chosen to compete on the basis of low costs, not on
being different than competitors.
(5) The cost leader will market products aimed at the “average” customer.
(6) Little or no product frills or differences will be available. No fancy artwork or
plush office furniture at corporate headquarters and no corporate jets.
(7) Cost leader won’t have an elaborate high-tech, multimedia interactive Web site
unless it’s an extremely cost effective and efficient way to reach masses of
potential customers.
(8) Examples: Payless Shoe Source, Collective Brands, Nucor Corporation and
Wal-Mart. Ask the students to identify common characteristics between these
 organizations
1. Other characteristics of cost leaders include:
a. Strict attention to production controls
b. Rigorous use of budgets
c. Little product differentiation—just enough to satisfy what the mass
market might demand
d. Limited market segmentation—products or services aimed at the
mass market
e. Emphasis on productivity improvements
f. Resources, distinctive capabilities and core competencies found in
production-operations and materials management
2. Drawbacks of the cost leadership strategy:
a. The main danger is that competitors might find ways of lowering
costs even further; taking away the cost leader’s cost advantage.
b. Competitors might be able to easily imitate what the cost leader is
doing and erode the cost advantage.
c. Cost leader, in its all-out pursuit of lowering costs, might lose sight
of changing customer tastes and needs.
(2) Differentiation Strategy
a) Organization competes by providing unique (different) products with features that:
i. Customers value,
ii. Perceive as different, and
iii. Are willing to pay a premium price for
b) The main goal of the differentiator is to provide products or services that are truly
unique and different in the eyes of customers.
c) Doing this, the differentiator can charge a premium price because customers perceive
that the product or service is different and that it uniquely meets their needs.
d) This premium price provides the profit incentive to compete on the basis of
differentiation.

For Your Information—Selling Luxury

• Have your students visit some of the Web sites mentioned as they consider these questions. Perhaps
several of your students have already used some of the services such as Lexus and General Electric’s
Profile washer and dryer. Encourage the students to share these “experiences” with the class.
• Are there other examples of luxury marketers trying new approaches to selling their products?
Student responses will vary on this question. Encourage students to identify as many luxury
marketers as possible.
● What do you think of these pitches?

Student responses to this question may vary based on their life and professional experiences.
• Is the differentiation strategy one that’s appropriate only in good economic times?
Student responses may vary, but should include differentiation will work in conditions where a
company’s products or services provides customers value, is perceived as different and customers
are willing to pay a premium price.

e) A successful differentiator:
i. All its capabilities, resources and functional strategies are aimed at
isolating and understanding specific market segments and developing
product features valued by customers in those various segments.
ii. Has broad and wide product lines—that is, many different models,
features, price ranges and so forth.
iii. Has countless variations of market segments and product features so
that the customer perceives the product or service as different and
unique and worth the extra price.
iv. Because the differentiation strategy can be expensive, the differentiator
 also needs to control costs to protect profits, but not to the extent that it
loses its source of differentiation.
f) Examples: Gap, Old Navy, Pottery Barn
g) Other characteristics of differentiators include:
i. Differentiating themselves along as many dimensions as possible and
segmenting the market into many niches.
ii. Establish brand loyalty, where customers consistently and repeatedly
seek out, purchase and use a particular brand. Brand loyalty can be a
very powerful competitive weapon for the differentiator.
iii. The differentiator’s distinctive capabilities tend to be in marketing and
research and development.
h) Drawbacks of the differentiation strategy
i. Must remain unique in customers’ eyes, which may be difficult
depending on competitors’ abilities to imitate and copy successful
differentiation features.
ii. Customers might become more price sensitive, and product differences
might become less important.
(3) Focus strategy is when an organization pursues either a cost or differentiation
advantage but in a limited (narrow) customer group or segment.
a) A focuser:
i. Concentrates on serving a limited (narrow) customer group or segment
known as a market niche:
a. Geographical niche can be defined in terms of region or
locality.
b. Type of customer niche focuses on a specific group of
customers.
c. Product line niche would focus on a specific and specialized
product line.
2. Pursues either a cost or differentiation advantage
a. Cost focuser competes
i. By having lower costs than the overall industry cost
leader in specific and narrow niches
ii. Also successful if an organization can produce
complex or custom-built products that don’t lend
themselves easily to cost efficiencies by the industry’s
overall cost leaders
b. Differentiation focuser can use whatever forms of
differentiation the broad differentiator might use, such as:
i. Product features
ii. Product innovations
iii. Product quality
iv. Customer responsiveness
v. Specializes in one or a few segments instead of all
market segments.
c. Advantages of the focus strategy:
i. The focuser knows its market niche well and can build
strong brand loyalty by responding to changing
customers’ needs
ii. The focuser who can provide products or services that
the broad competitors can’t or won’t, will have the
niche all to itself.

Strategic Management—The Global Perspective: Abraaj Capital

• Do you think a cost focus or differentiation focus strategy might be more appropriate?
 ▪ A differentiation focus strategy might be more appropriate as Abraaj Capital might focus on
product features, product innovation, product quality, or customer responsiveness to outcompete
its rivals (i.e., Goldman Sachs, Citigroup) in the Middle East and Southeast Asia markets.

d. Drawbacks of the focus strategy

i. The focuser often operates on a small scale making it
difficult to lower costs significantly. However, with
technological advancements such as flexible
manufacturing systems, this drawback is not as critical
as it once was. As information and computer
technology become more affordable, focusers have
discovered that economies (cost efficiencies) don’t
necessarily have to come from large-scale production
runs.
ii. The niche customers might change their tastes or
needs. Because it is often difficult for a focuser to
change niches easily and quickly, this could be a
serious problem. In addition, any technological
changes that might impact the niche can have a similar
effect.
iii. The threat of the broad differentiator taking notice of
the focuser’s market niche, especially if the focuser is
enjoying a significant level of success, and moving in
to offer products and services to those customers.
(4) Stuck in the Middle
a) Happens when an organization isn’t successfully pursuing either a low-cost
or a differentiation competitive advantage
b) Occurs when an organization’s:
1. Costs are too high to compete with the low-cost leader.
2. Products and services aren’t differentiated enough to compete with the
differentiator.
c) This is not a preferred or profitable strategic direction.
d) Becoming “unstuck” means making consistent strategic decisions about what
competitive advantage to pursue and then doing so by aligning resources,
distinctive capabilities and core competencies.

Teaching Notes: _______________________________________________________________________

_____________________________________________________________________________________
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3. Contemporary Views on Competitive Strategy

Some of the newer perspectives provide an expanded, and perhaps more realistic, description of
what competitive strategies organizations are using.
a. Integrated Low-Cost Differentiation Strategy
i. Competitive advantage by simultaneously achieving low costs and high levels of
differentiation.
ii. Technological advancements that make this hybrid competitive strategy possible are:
a) Flexible manufacturing systems
b) Just-in-time inventory systems
c) Integrated manufacturing systems
b. Just because these technological advancements are available and accessible doesn’t
mean that every organization that uses them will be able to successfully implement an
integrated low-cost differentiation strategy.
Strategic Management in Action: Dell
• A classroom discussion may be beneficial, given that many of your students will be quite familiar
with Dell computer. Ask your students to discuss whether they have Gateway, Hewlett-Packard,
IBM, or another PC manufacturer. Ask your students how Dell has lost its market share and ask for
suggestions on how it might regain the competitive edge it had.

b. Mintzberg’s Generic Competitive Strategies

i. Henry Mintzberg developed an alternative typology of six possible competitive
strategies that better reflected the increasing complexity of the competitive
environment.
The following is taken from Figure 5.4: Mintzberg’s Generic Competitive Strategies.
a) Differentiation by price: Modification of Porter’s cost leadership; advantage
from organization’s ability to charge below-average market prices.
Differentiated on basis of price.
b) Differentiation by marketing image: Organization attempts to create a
certain image in customers’ minds. Uses marketing image as potent competitive
weapon.
c) Differentiation by product design: Competition on basis of providing
desirable product features and design configurations; offers wide selections of
product features and different designs.
d) Differentiation by quality: Deliver higher reliability and performance at a
comparable price. Superior product quality pursued at a comparable price.
e) Differentiation by product support: Emphasizing customer support services.
Providing all-encompassing bundle of desired customer support services.
f) Undifferentiated strategy: No basis for differentiation or following a copycat
strategy.

ii. The verdict on Mintzberg’s alternative generic competitive strategies typology appears
to have merit.

Teaching Notes: _______________________________________________________________________

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Learning Review: Learning Outcome 5.3

• Describe each of Miles and Snow’s four adaptive strategies?
• Prospector strategy is one in which an organization continually innovates by finding and
exploiting new product and market opportunities.
• Defender strategy is characterized by the search for market stability and producing only a limited
product line directed at a narrow segment of the total potential market.
• Analyzer strategy is one of analysis and imitation.
• Reactor strategy is the lack of a coherent strategic plan or apparent means of competing.
• According to Porter, what are the two types of competitive advantage?
• Competitive advantage can come from either having the lowest costs in the industry or from
possessing significant and desirable differences from competitors.
• Describe each of Porter’s generic competitive strategies.
 • Cost leadership strategy is one in which an organization strives to have the lowest costs in its
industry and produces products or services for a broad customer base.
• Differentiation strategy is a strategy in which the organization competes on the basis of
providing unique (different) products-services with features that customers value, perceive as
different and are willing to pay a premium price for.
• A Cost Focuser competes by having lower costs than the overall industry cost leader in specific
and narrow niches.
• The Differentiation Focuser can use whatever forms of differentiation the broad differentiator
might use—product features, product innovations, product quality, customer responsiveness, or
whatever. The only difference is that the focuser is specializing in one or a few segments instead
of all market segments.
• What does it mean to be “stuck in the middle?”
• Stuck in the middle happens when an organization isn’t successfully pursuing either a low cost
or a differentiation competitive advantage. An organization becomes stuck in the middle when its
costs are too high to compete with the low-cost leader or when its products and services aren’t
differentiated enough to compete with the differentiator.
• What is the integrated low-cost differentiation strategy and how does it contradict the concept behind
Porter’s generic competitive strategies?
• An integrated low-cost differentiation strategy is one in which an organization develops a
competitive advantage by simultaneously achieving low costs and high levels of differentiation.
• Porter’s original work maintained that an organization couldn’t simultaneously pursue a low-cost
and a differentiation advantage. Despite strong empirical support for Porter’s strategy framework,
several strategy researchers questioned this “mutual exclusivity.” Instead of having to pursue one
or the other, strategy research evidence is starting to show that organizations can pursue an
integrated low-cost differentiation strategy and do so successfully.
• Describe each of the competitive strategies in Mintzberg’s generic strategy typology.
• Differentiation by price is a modification of Porter’s cost leadership strategy.
• Differentiation by marketing image described a competitive strategy in which an organization
attempted to create a certain image in customers’ minds.
• Differentiation by product design can be used to describe organizations that competed on the basis
of providing desirable product features and design configurations.
• Differentiation by quality described a strategy in which organizations competed by delivering
higher reliability and performance at a comparable price.
• Differentiation by product support emphasized the customer support services provided by the
organization.
• Undifferentiated strategy described situations in which an organization had no basis for
differentiation or when it deliberately followed a copycat strategy.

LEARNING OUTCOME 5.4

DISCUSS HOW COMPETITIVE STRATEGIES ARE IMPLEMENTED AND EVALUATED

The Grey Zone: The Class of 2015

Have students brainstorm a list of companies who have targeted them simply because they are in
college. What do these companies have in common? What approaches do they use to gain the
students as customers? Does it work? What turns them off?

A. Implementing Competitive Strategy

Implementation utilizes resources, distinctive capabilities and core competencies. If a strategy is
not implemented, then it’s nothing more than an idea. Functional strategies play a significant
role in implementing competitive strategy.
1. The Role of Functional Strategies
a) Functional strategies:
(1) Play a critical role in the implementation of its competitive strategy.
 (a) The challenge in implementing the organization’s competitive strategy is to
create and exploit a sustainable competitive advantage.
(b) This competitive advantage comes from the organization’s ability to use its
resources to develop capabilities that may become distinctive.
(c) All of these details happen through the actual strategies that are being used in
the various functional work units of the organization.
(2) Have a dual role that influence both:
(a) What competitive strategy is most appropriate?
(1) Depends on what organizational resources and capabilities currently
available or being acquired and developed through the functional strategies.
(2) To successfully attain a sustainable competitive advantage, each of Porter’s
generic competitive strategies requires certain skills, resources and
organizational requirements. (Table 5.4)
(b) How is that strategy implemented?
(1) The strategy(ies) being used in each functional area should support
whatever competitive advantage (and competitive strategy) is being
pursued.
(a) If competition is based on having the lowest costs, then:
(1) Functional strategies being used should support and reinforce that
strategy.
(2) Cost efficiencies would be pursued in all operational areas, but
particularly in production-operations.
(3) Financial strategies could support the quest for operational
efficiency including such things as capital investment in technology
if it’s needed and could contribute to lowering costs.
(4) All organizational resources, distinctive capabilities and core
competencies would be directed at attaining the goal of having the
industry’s lowest costs.
(b) If the organization chose to compete on the basis of both low costs and
differentiation, then its functional strategies better reflect that choice or
it will never be able to develop a sustainable competitive advantage.

Active Learning Hint

• Define fast follower (copycat) and give an example to the class. Have students debate which skills,
resources and requirements best fit a company pursuing a “fast follower” strategy.
To do this have students address the following questions:
▪ Do copycats need strong marketing abilities? Why?
▪ Do copycats need good engineering skills? Should those skills be for new product development or
for process/cost engineering?
▪ Would you focus more on control or innovation in your production process? Explain.

Strategic Management Action: Singapore Airlines (SIA)

This sidebar illustrates competitive action in the air travel industry. A key question is whether there will
be any brand loyalty to specific airlines. What makes customers loyal to a particular airline? Is it the
details or is it simply a price decision? Could famous people play a role as celebrity endorsers?

2. Competitive Actions
Once an organization’s competitive strategy is implemented through functional decisions and
actions, it will use certain postures, actions and tactics as it competes against other organizations
for customers, market share, or other desired objects or outcomes.
a) Offensive moves are when an organization attempts to exploit and strengthen its
 competitive position through attacks on a competitor’s position.
(1) Frontal assault is when the attacking firm goes head-to-head with its competitor by
matching it in every possible category, such as price, promotion, product features
and distribution channel.
(2) Attack competitors’ weaknesses wherever those weaknesses are.
(a) Concentrate on geographic areas where the competitor is weak.
(b) Serve customer segments that a competitor is ignoring or the competitor’s
offerings are weak.
(c) Introduce new product models or features to fill gaps its competitors aren’t
serving.
(3) All-out attack on competitors by hitting them from both the product and the market
segment side.
(4) Avoid direct, head-on competitive challenges by maneuvering around competitors
and subtly changing the rules of the game.
(a) Create new market segments that competitors aren’t serving by introducing
products with different features.
(b) This action cuts the market out from under the competitor.
(5) “Guerilla” attacks are small, intermittent, seemingly random assaults on
competitors’ markets.
(a) Use of special promotions, price incentives, or advertising campaigns.
b) Defensive moves describe when an organization is attempting to protect its competitive
advantage and turf. These moves do not increase an organization’s competitive
advantage, but can make the competitive advantage more sustainable.
(1) Prevent challengers from attacking by not giving them any areas to attack.
(a) Offer full line of products.
(b) Use of exclusive agreements with dealers to block competitors.
(c) Protect technologies through patent and licenses.
(2) Increase competitors’ beliefs that significant retaliation can be expected if
competitive attacks are initiated.
(a) Public announcements by managers to “protect” market share.
(b) Strong responses to competitors’ moves, such as matching price cuts.
(c) Competitive counterattacks are critical if the markets or segments being
attacked are crucial to the organization.
(d) Retaliation should be used with caution against a new entrant because research
shows that the typical new entrant does not pose a serious threat and retaliation
can be expensive.
(3) The final type of defensive move involves lowering the incentive for a competitor
to attack.
(a) Lead the potential attacker to believe that the expectations of future profits are
minimal.
(b) Keep prices low and continually invest in cost lowering action.

B. Evaluating and Changing Competitive Strategy

The responsibility of managing strategically doesn’t stop once the competitive strategy is
implemented. Strategies must be monitored, assessed and evaluated for performance
effectiveness and efficiency.
1. Evaluation of the competitive strategy assesses the organization’s various functional areas
and the activities performed there. Some evaluation questions to ask:
a) What are the results of the various strategies?
b) Are they having the intended effect?
c) Is competitive advantage being successfully exploited?
d) Why or why not?
e) What if results aren’t as high as expected, or what if they’re better than expected?
f) Has the market changed and the organization hasn’t?
 g) Are the organization’s numerous resources and capabilities being used effectively and
efficiently so that the needed and crucial competitive advantage is being developed and
exploited? Which ones are and which ones aren’t?
2. Changing organization’s competitive strategy when the evaluation shows the strategy isn’t
having the intended impact or hasn’t resulted in desired levels of performance.
a) Change in the organization’s fundamental competitive strategy isn’t something that
organizations want to do frequently or continually.
(1) Each competitive strategy entails the development of specific resources, capabilities
and distinctive competencies. Changing the competitive strategy means modifying
or redeveloping the organization’s resources and capabilities which is difficult and
expensive.
(2) This doesn’t, and shouldn’t, mean that an organization would never change its basic
competitive approach. What it does mean is that this type of major strategic change
should be approached realistically and intelligently.
b) Although changing the organization’s basic competitive strategy isn’t highly likely,
modifying the organization’s competitive actions is.

Teaching Notes: _______________________________________________________________________

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Learning Review: Learning Outcome 5.4

• Why is strategy implementation critical?
• If a strategy is not implemented, then it’s nothing more than a strategic idea or plan.
• Describe the role(s) that functional strategies play in implementing the organization’s competitive
strategy.
• In implementation, functional strategies play a dual role of what and how. What competitive
strategy is most appropriate and how that strategy is implemented.
• Describe the offensive and defensive competitive actions an organization might use.
• Offensive moves are when an organization attempts to exploit and strengthen its competitive
position through attacks on a competitor’s position.
• A frontal assault is when the attacking firm goes head-to-head with its competitor and matches the
competitor in every possible category such as price, promotion, product features, and distribution
channel. Another offensive tactic is to attack competitors’ weaknesses. Another offensive tactic is
to use an all-out attack on competitors by hitting them from both the product and the market
segment side. Another type of offensive move is to avoid direct, head-on competitive challenges
by maneuvering around competitors and subtly changing the rules of the game. Finally, another
possible offensive tactic is to use “guerilla” attacks.
• Defensive moves describe when an organization is attempting to protect its competitive advantage
and turf.
• One defensive move is to prevent challengers from attacking by not giving them any areas to
attack. Another possible defensive move is to increase competitors’ beliefs that significant
retaliation can be expected if competitive attacks are initiated. The final type of defensive move
involves lowering the incentive for a competitor to attack.
• How should an organization’s competitive strategy be evaluated?
 • The responsibility of managing strategically doesn’t stop once the competitive strategy is
implemented. Strategies must be monitored, assessed, and evaluated for performance
effectiveness and efficiency.
• Most organizations’ competitive strategies are targeted at increasing sales revenues, market share,
or profitability, so data on these particular performance areas would be required to determine what
impact the competitive strategies are having.

THE BOTTOM LINE

Learning Outcome 5.1: Describe the functional strategies an organization needs and
explain how those strategies are implemented and evaluated.
• Functional strategies: short-term, goal-directed decisions and actions of the
organization’s various functional areas.
• All organizations must acquire and transform resources (inputs) into outputs (products),
which are then made available to the organization’s customers or clients.
• Organizations have three functional concerns: the product, the people, and the support
processes.
• The Product: product functional strategies include product design, production–
operations, and marketing.
• Product design and development strategies are part of the R&D functional area.
Strategic choices include timing (first mover: organization that’s first to bring a new
product or innovation to the marketplace); who will do design and development
(separate R&D department, cross-functional team: a group of individuals from various
departments who work together on product or process development, or some
combination); and how design and development process will take place (formal or
informal process, type of and how much research, and extensive or limited use of
various R&D tasks).
• Production-operations: process of creating and providing goods and services. Strategic
choices include how and where products will be produced. These choices encompass
the design and management of the production-operations process.
• Marketing: process of assessing and meeting the wants and needs of individuals or
groups by creating, offering, and exchanging products of value. Marketing strategies are
directed at managing the two Cs: customers and competitors. Strategic choices involve
segmentation or target market, differentiation, positioning, marketing mix, connecting
with customers, gaining marketing insights, building strong brands, designing effective
marketing communications and managing the marketing functional area.
• The People: people (HR) functional strategies reflect an organization’s commitment to
and its treatment of its employees. HR strategies can be a significant source of
competitive advantage and can have a positive impact on performance (high-
performance work practices: HR practices that lead to both high individual and high
organizational performance). Strategic choices involve getting people into the
organization, making sure they have the necessary knowledge and skills to do their jobs
and helping them do those jobs better, assessing how well they do those jobs and
making needed corrections, and motivating high levels of effort and compensating them
fairly. May also address other HR issues such as employee relations, diversity efforts,
etc.
• The Support Processes: support processes support the organization as it does its work.
The two main ones include information systems and financial-accounting systems.
 • Information system: a system for collecting, processing, storing and disseminating
information that managers need to operate a business. Strategic choices involve the
choice of system technology and the choice of types of information systems desired.
• Financial–accounting systems provide strategic decision makers with information about
the organization’s financial accounts and financial position. Strategic choices include
collecting and using financial–accounting data, evaluating financial performance, doing
financial forecasting and budgeting, determining the optimum financing mix and
effectively and efficiently managing the financial-accounting area.
Learning Outcome 5.2: Explain what competitive advantage is and what it implies.
• Competitive advantage: what sets an organization apart, which can come from
distinctive capabilities or unique resources. It implies there are other competitors.
• Competition: when organizations battle or vie for some desired object or outcome. The
types of competition an organization might face can be understood by looking at who
competitors are.
• Three approaches to defining an organization’s competitors include: (1) industry
perspective, which identifies competitors as organizations that are making and selling
the same or highly similar goods or services; (2) market perspective, which says
competitors are organizations that satisfy the same customer need; and (3) strategic
groups concept, which is based on the idea there are groups of firms competing within
an industry that have similar strategies, resources and customers.
• Organizations develop strategies that exploit resources and capabilities to get a
competitive advantage, thus setting the stage for competition.
• Competitive strategy: strategy for how an organization or business unit is going to
compete.
Learning Outcome 5.3: Describe the different competitive strategies.
• The traditional approaches to defining competitive strategies are Miles and Snow’s
adaptive strategies and Porter’s generic competitive strategies.
• Miles and Snow’s four adaptive strategies include: (1) prospector: a strategy in which
an organization continually innovates by finding and exploiting new product and market
opportunities, (2) defender: a strategy used by an organization to protect its current
market share by emphasizing existing products and producing a limited product line, (3)
analyzer: a strategy of analysis and imitation, and (4) reactor: a strategy characterized
by the lack of a coherent strategic plan or apparent means of competing.
• Porter’s generic competitive strategies are based on competitive advantage (either low
costs or unique and desirable differences) and product–market scope (broad or narrow).
He identifies three strategies: (1) cost leadership: a strategy in which an organization
strives to have the lowest costs in its industry and produces products for a broad
customer base; (2) differentiation: a strategy in which an organization competes by
providing unique (different) products in the broad market that customers value, perceive
as different, and are willing to pay a premium price for; the differentiator works hard to
establish brand loyalty: customers consistently and repeatedly seek out, purchase, and
use a particular brand; (3) focus: a strategy where an organization pursues either a cost
or differentiation advantage in a limited customer segment.
• Porter also identifies a strategy of stuck in the middle, which happens when an
organization can’t develop a low cost or a differentiation advantage.
• There are two contemporary views on competitive strategy. The first is the integrated
low cost–differentiation strategy, which involves simultaneously achieving low costs
and high differentiation. Some organizations have been able to do this because of
technology.
 • The second contemporary view is Mintzberg’s generic competitive strategies. He
proposes that an organization’s strategy is either differentiation or being
undifferentiated. If it chooses differentiation, it does so by price, marketing image,
product design, product quality, or product support.
Learning Outcome 5.4: Discuss how competitive strategies are implemented and
evaluated.
• Competitive strategies are implemented through the functional strategies; that is, the
resources and distinctive capabilities found in the functional areas influence which
competitive strategy is most feasible. In addition, the functional strategies support the
organization’s competitive advantage and strategy.
• Competitive strategies are also implemented through competitive actions, which
include: (1) offensive moves: an organization’s attempts to exploit and strengthen its
competitive position through attacks on a competitor’s position, and (2) defensive
moves: an organization’s attempts to protect its competitive advantage and turf.
• Competitive strategies are evaluated by the performance results obtained. What
competitive weaknesses and strengths does the organization have?
• Changing the competitive strategy isn’t something that organizations do frequently
because it’s based on specific resources, distinctive capabilities and core competencies
developed in the functional areas. Changing would mean modifying or redeveloping
those. What is likely to be changed are the organization’s competitive actions.
Suggestions for using YOU as Strategic Decision Maker: Building Your Skills exercises
1. This is a good opportunity to discuss the "value chain" concept. Have your students conduct an
Internet search for value chain related articles. One site of particular note is Industry Week's Web
site (www.iwvaluechain.com). Have the students review various articles available for download or
review. [Learning Outcome 5.1: Describe the functional strategies an organization needs and
explain how those strategies are implemented and evaluated; Course Level Objectives:
Identify and describe common types of functional strategies; AACSB: Reflective thinking
skills]
2. There are many good articles available about Jack Welch from Fortune, Time, Business Week, etc.
Have your students research this leader and his decisions over the last few years with General
Electric with particular focus on functional activities. [Learning Outcome 5.1: Describe the
functional strategies an organization needs and explain how those strategies are implemented
and evaluated; Course Level Objectives: Identify and describe common types of functional
strategies; AACSB: Reflective thinking skills]
3. Visit the Web site www.cybercrime.gov, link to “economic espionage” for a list of cases and press
releases regarding economic espionage. It may be interesting for the students to visit the site, and
select a case to review, and then evaluate the implications for functional strategy formulation and
implementation. Ask the students to brainstorm ways there are to protect businesses from having
their highly confidential information stolen. [Learning Outcome 5.1: Describe the functional
strategies an organization needs and explain how those strategies are implemented and
evaluated; Course Level Objectives: Identify and describe common types of functional
strategies; AACSB: Reflective thinking skills]
4. Take a class poll to determine how many of the students have used online customer service
activities, and why they use them. Is it easier/better than calling customer service? Why? From the
organization’s point of view, what are the advantages and disadvantages? Ask the students to
brainstorm how the strategic decision makers can address the disadvantages. [Learning Outcome
5.1: Describe the functional strategies an organization needs and explain how those strategies
are implemented and evaluated; Course Level Objectives: Discuss best practices for strategy
implementation; AACSB: Reflective thinking skills]
5. As an alternative, this exercise could be divided among groups in the class. Ask each group to
research a different type of sponsorship, provide several examples and evaluate the strategy. Have
the groups report back to the class. [Learning Outcome 5.2: Explain competitive advantage and
what it implies; AACSB: Reflective thinking skills]
6. You may wish to have students record their “perfect job” description prior to assigning this
exercise. Ask the students to do research on companies they would like to work for and then
compare what they find in their research with their expectations. Quality of work life has been the
focus of many research activities over the last couple of decades. [Learning Outcome 5.2:
Explain competitive advantage and what it implies; AACSB: Communication skills,
Reflective thinking skills]
7. You may wish to begin by establishing a few of the expectations organizations have for new
information technology systems. Ask the class members to consider who will be using the system
and how the information will be used. [Learning Outcome 5.2: Explain competitive advantage
and what it implies; AACSB: Reflective thinking skills]
8. This a good exercise to illustrate the multifunctional dimensions of strategic planning. Ask the
students in groups to prepare a one-page “talking points,” bulleted list of its key points for
distribution and presentation to the entire class. [Learning Outcome 5.1: Describe the functional
strategies an organization needs and explain how those strategies are implemented and
evaluated; Course Level Objectives: Discuss best practices for strategy implementation;
AACSB: Reflective thinking skills]
9. You might discuss the criteria Fortune uses to select the top 100 and to compare the list year-to-
year. Can the strategies employed work at all types of organizations? Why or why not? This
exercise could be an individual, but might be more effective as a small group project. [Learning
Outcome 5.1: Describe the functional strategies an organization needs and explain how those
strategies are implemented and evaluated; Course Level Objectives: Discuss best practices
for strategy implementation; AACSB: Reflective thinking skills]
10. This is a good extension of a discussion on sources of competitive advantage. You may wish to
include “copyright” protection and international issues in the classroom discussion. [Learning
Outcome 5.4: Discuss how competitive strategies are implemented and evaluated; Course
Level Objectives: Discuss best practices for strategy implementation; AACSB: Use of
information technology, Reflective thinking skills]
11. The Art of War can be a very interesting exercise. Inevitable comparisons will arise with United
States military-related actions such as Iraq, Granada, the Gulf War, Vietnam and Korea. You may
address some of the statements in this exercise for greater understanding, however, be prepared for
students to take a different view than former generations. After the class discussion, have the
students look for business examples. [Learning Outcome 5.3: Describe the different
competitive strategies; Course Level Objectives: Discuss best practices for strategy
implementation; AACSB: Reflective thinking skills]
12. This assignment could be used as a group out-of-class assignment, as a lively, in-class discussion or
exam essay question. [Learning Outcome 5.2: Explain competitive advantage and what it
implies; Course Level Objectives: Discuss best practices for strategy implementation;
AACSB: Analytic skills]
13. This could be assigned as an out-of-class project for individuals or groups. The Web site
[www.interbrand.com] will contain the brand survey for the students to use. [Learning Outcome
5.4: Discuss how competitive strategies are implemented and evaluated; Course Level
Objectives: Discuss best practices for strategy implementation; AACSB: Use of information
technology, Reflective thinking skills]

Strategic Management in Action Cases

Case #1 Driving for Success

1. Keys to Toyota’s success include: Tight control of the production process so that they know that
they are within specifications or if variation has occurred. This system then allows Toyota to
customize (by controlled variation) the product in a short period of time without risking losing
control of the production process and suffering poor quality. Toyota produces very high quality
products that are innovative enough to satisfy most customers. [Learning Outcome 5.1: Describe
the functional strategies an organization needs and explain how those strategies are
implemented and evaluated; Course Level Objectives: Discuss best practices for strategy
implementation; AACSB: Reflective thinking skills]

2. Production is most important to Toyota as evidenced by their investment in such strong production
controls and methods. Their cars are sold based on their quality and their resulting high resale
values. These attributes support their marketing campaigns that showcase the quality of Toyota’s
cars. Encourage students to list the production strategies detailed in the case to show the firm’s
engineering and production expertise. [Learning Outcome 5.1: Describe the functional
strategies an organization needs and explain how those strategies are implemented and
evaluated; Course Level Objectives: Discuss best practices for strategy implementation;
AACSB: Reflective thinking skills]

3. Coordination among the strategies at Toyota is especially important as most contribute to the
production process. Ask students: What would happen if Toyota launched marketing campaigns
 praising the highly innovative and sporty styling of a Camry (a fairly conservative model)? How
would consumers react to that message which seems inconsistent with the car’s styling? [Learning
Outcome 5.4: Describe how competitive strategies are implemented and evaluated; Course
Level Objectives: Discuss best practices for strategy implementation; AACSB: Reflective
thinking skills]

4. You might have students compare the advertising and descriptions of Toyota’s mainstream vehicles
with the approach they are using to reach a more trendy and youthful market with the Scion car line.
Scion is a big departure for Toyota from its traditional focus but still builds on its key strengths of
cost control and engineering by introducing boldly styled cars with quality construction but at a low
price. Ask students why Toyota introduced this new line? (Could it be to get first time buyers into
the Toyota “family” hoping for their continued loyalty in future car purchases as they move beyond
these low priced cars? [Learning Outcome 5.1: Describe the functional strategies an
organization needs and explain how those strategies are implemented and evaluated; Course
Level Objectives: Discuss best practices for strategy implementation; AACSB: Use of
information technology, Reflective thinking skills]

Case #2 They’ve Got Game

1. Miles and Snow: A prospector is consistently developing new products and innovative advertising
and endorsements.

Porter’s framework: Broad scope with differentiation between segments but the same overall
approach of designing innovative look and using big stars to promote. [Learning Outcome 5.2:
Explain competitive advantage and what it implies; Course Level Objectives: Discuss best
practices for strategy implementation; AACSB: Reflective thinking skills]

2. Nike’s competitive advantages that have contributed to its competitive advantage are: high brand
image; innovative designs; memorable ads and endorsers; and lots of store shelf space. Nike’s
ability to advertise in unique ways complements innovative product design. [Learning Outcome
5.2: Explain competitive advantage and what it implies; Course Level Objectives: Discuss
best practices for strategy implementation; AACSB: Reflective thinking skills]

3. Yes, Nike’s functional strategies support its competitive strategy by the following: keeping its costs
down but prices up to make room for expensive endorsements; efficient ad campaigns in that they
can travel well across borders and still have meaning and stars have good recognition abroad also;
and by staying innovative and having clever ads Nike continues to draw large numbers of
enthusiastic buyers willing to pay higher prices for perceived value added. [Learning Outcome
5.3: Describe the different competitive strategies; Course Level Objectives: Discuss best
practices for strategy implementation; AACSB: Reflective thinking skills]

4. To maintain its strong competitive position, Nike is going to have to stay innovative; need to be
perceived as the best product with serious sports enthusiasts not just the best marketers; continue to
hire up-and-coming stars; and avoid any scandals so as to limit its competitors’ ability to make any
inroads into Nike’s markets. [Learning Outcome 5.2: Explain competitive advantage and what
it implies; Course Level Objectives: Discuss best practices for strategy implementation;
AACSB: Reflective thinking skills]
Case #3 Rewind and Replay

1. Miles and Snow: Originally, Netflix was probably a Prospector as it sought innovation. However,
recent decisions have put the company in the Reactor category. Some students could make a case
that the firm is a Defender now that new competitors have entered the market.

Porter’s framework: Students may identify one or more of Porter’s strategies. However, based
upon the information presented in the case, one might argue that a differentiation strategy is taking
place as Netflix attempts to demonstrate to consumers its uniqueness compared to others. Although,
a case could also be made that Netflix is now stuck in the middle as it is neither different nor low
cost. [Learning Outcome 5.2: Explain competitive advantage and what it implies; Course
Level Objectives: Discuss best practices for strategy implementation; AACSB: Reflective
thinking skills]

2. Students might identify any number of competitive advantages for Netflix. They should be able to
explain how the firm’s resources, capabilities, and/or core competencies contributed to this
competitive advantage, using material from the chapter. [Learning Outcome 5.2: Explain
competitive advantage and what it implies; Course Level Objectives: Discuss best practices
for strategy implementation; AACSB: Reflective thinking skills]

3. Students may focus on all three functional concerns (product, people, and support processes). For
product, be sure that they look at Netflix’s design – especially how product is delivered to the
consumer. Also, the production/operations as well as marketing should be mentioned. For people
strategies, well-trained customer service will be important when customers have a problem. Finally,
for support processes, the information systems and financial-accounting systems must be modern
and sound. [Learning Outcome 5.2: Explain competitive advantage and what it implies;
Course Level Objectives: Discuss best practices for strategy implementation; AACSB:
Reflective thinking skills]

4. This is an opinion question, but students might focus on price (being the low cost provider) or on
service (offering more selection in a faster format). [Learning Outcome 5.2: Explain competitive
advantage and what it implies; Course Level Objectives: Discuss best practices for strategy
implementation; AACSB: Reflective thinking skills]

Case #4 Casting a Wider Net

1. Students may focus on the fact that there are literally thousands of widely different products in a
single location – providing something for every type of buyer. Shopping at these huge stores
becomes an experience with lots of participatory demonstrations of products. Restaurants and other
features make the shop a destination…more fun than the average mall or “big box” store visit. Bass
Pro Shops are a chain of locations that seek to duplicate the success of the original store. [Learning
Outcome 5.1: Describe the functional strategies an organization needs and explain how those
strategies are implemented and evaluated; Course Level Objectives: Discuss best practices
for strategy implementation; AACSB: Reflective thinking skills]

2. Some challenges in replicating this strategy for Bass Pro are: The need to standardize what is sold
and how it is promoted (efficiency argument for global or uniform production function) and how to
incorporate local needs and interests that differ regionally. For example, Bass Pro in Minnesota
might showcase camping and lake fishing, minimizing scuba or surf fishing equipment (not as much
need for that in MN).

Another issue for Bass Pro is to ensure its sales associates are knowledgeable of their products. It
may be a problem to hire skilled bass fishing experts in Nevada or New Mexico where fishing is not
as common a sport as in Missouri. In addition, as the chain of shops expands, Bass Pro will run up
against competitors who are entrenched in the local market and may be able to successfully defend
 their markets making investment in new mega-stores less profitable. [Learning Outcome 5.2:
Explain competitive advantage and what it implies; Course Level Objectives: Discuss best
practices for strategy implementation; AACSB: Reflective thinking skills]

3. Visit the Web site. [Learning Outcome 5.2: Explain competitive advantage and what it
implies; Course Level Objectives: Discuss the functions of vision statements, mission
statements, and long-term corporate objectives; AACSB: Use of information technology,
Reflective thinking skills]
Another random document with
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camp—would stand with hands in pockets, staring after in silent
admiration. Uncle Hank was wiry and grizzled and storm-beaten; his
pointed beard stood out at a strong angle to his determined nose; his
eyes were of a mild and pleasant blue, but the fire in them awaited
only the flint. His laugh was merry, but he had a voice that would
make the most obstreperous horse remember that he was but as the
dust of the earth before this master.
Uncle Hank was at the helm of the transportation system of
Paradise Bar; he and his stage the connecting link between camp
and civilization, the latter represented by the county seat, Meadow
Lark.
Uncle Hank, recognizing his importance in both communities, and
especially in Paradise Bar, was as gracious as an only hope—he
was never forlorn. He was an absolute dictator, it was true; he even
decided the locations of the passengers on the stage, and settled
disputes as to outside and inside. But he was autocratic wisely, and
there was really no reason why he should have been called upon to
divide his sovereignty. Yet, one sad day the Alladin Bonanza
Company built a lumber road down from Paradise Bar to Lone Pine.
At Lone Pine the new road connected with the line of the Gray Eagle
Stage Company, which, as Uncle Hank put it, flopped its way up
from Meadow Lark. So, when the Gray Eagle extended its tri-weekly
service from Lone Pine to Paradise Bar, trouble outcropped on Uncle
Hank’s trail at once. George William Pike, of the Upper Basin, was
the driver to whom Uncle Hank referred as the dry goods clerk who
handled the ribbons for the opposition corporation.
George William surmised here and there and elsewhere, when he
cornered an audience, that the new route was two miles the shorter,
and the grade, calculating ups and downs, at least five per cent
better. The report reached Uncle Hank by air line, of course. He was
silent a little while, and then with elaborate courtesy thanked his
informant, adding that he was greatly obliged, not for the news itself,
but because he had for a long time been trying to recollect the name
of the chap who left Placerville after trying circumstances without
advising his bondsmen. It was indeed strange that a man caught
stealing garments from a poor washerwoman’s clothes line should
be directing horses; remarkably odd, when it was evident that he
was cut out for a Chinaman and not a stage driver. So saying, Uncle
Hank awoke an echo unusually far off, making it jump startled from
the hillside at the crack of his whip, and drove on.
There was some difference of opinion in Paradise Bar concerning
the merits of the two lines; so long as they ran on different days and
at different hours, the question could not be satisfactorily settled, and
the Bright Light kept open an hour later in the evening to permit a full
discussion of the subject—thereby saving shutting up at all. The real
trouble began when the Gray Eagle line, perceiving that Uncle Hank
continued to carry the larger part of the business, borrowed his
schedule and started to operate upon it with their new yellow coach
with vermillion trimmings and four white horses, to say nothing of
George William Pike with his curled mustache, red necktie and
stand-up collar. He would have worn a silk hat too—the owners of
the line were aristocrats, with ideas and winter residences in Lunnon
—but Morosin’ Jones who squirmed his shoulders and clasped his
hands like an awkward maid of fifteen when he talked, begged him
to desist; he, Morosin’, had such an unconquerable inclination to
perforate high hats with his forty-four wherever they might be.
George William wisely desisted. Uncle Hank’s stage had nothing but
a faint recollection of paint, and was written over with history
recorded by bullet holes; the harness was apt to be patched, and
Nebuchadnezzar, the off leader, was wall-eyed, and his partner,
Moloch, sway-backed and short maned. Of the wheel horses, one
was a gray with hoofs that needed constant paring; the other had the
appearance of a whitewashed house at which mud had been flung
with startling effect. Of the two, Rome and Athens, no god could
have decided which was entitled to the palm of ugliness; but Uncle
Hank, who loved them all with the love a man may have for a homely
dog, declared that the wheel-horses were beauty spots in nature
alongside the leaders.
It was a memorable morning on which the two stages left Paradise
Bar together. The yellow stage, with its nickel-plated harness and
white horses and tan-gloved driver, started three minutes first; and
then, as if gathering up his horses and the stage and the reins
altogether, Uncle Hank went down the line. It was a lively experience
for the passengers; bends they went around on two wheels, creeks
they took at a leap, bowlders and ruts only they avoided, and that
because a scientist was using his science. The grade of the other
line must have been at that time very good, for Uncle Hank had been
only four minutes hitched in front of the Elysium Hotel when the other
stage drew up. It was true that he picked his teeth as if he had been
in to lunch, and casually enquired of a passenger, so that George
William might hear, if they had stopped for dinner on the road, or did
they expect to get it at the hotel; whereat the passenger, jolted and
jarred beyond good manners, roared: “Stop for dinner! Great Scott!
We stopped for nothing—bowlders, rivers, landslides and precipices;
if his Satanic Majesty was after us, he found the worst trail he ever
traveled—and I can’t imagine what other reason there could be for
such driving.”
The passenger went into the hotel. George William said something
below his breath, and Uncle Hank smiled. Alas for vanity! Ever it
goes before a stumble, a broken spring or a sick horse. The stages
had different schedules for the upward trip, but on the next journey
downward disaster overtook Uncle Hank. Seven of the nine hours’
ride were accomplished, and the stage was at the mouth of the
canyon. Here a point of rock thrusts itself forward, marking a sharp
turn in the road. Around this turn galloped the horses, and twenty
feet before him, sunning itself in the road, Moloch saw an eleven-
button rattler. He knew what that meant, and sat down and slid with
all four feet plowing the mountain road. They stopped short of the
snake, that had coiled and awaited their coming, and then perceiving
the enemy otherwise engaged, had wisely slipped into the
manzanitas by the roadside. Fifteen precious minutes were used in
repairing the disaster to the harness—and the race was lost. That
night, for the first time in the ten years in which he had been the
oracle of two communities, Uncle Hank, instead of telling stories and
expounding wisdom for the benefit of the unenlightened below, went
up to his room immediately after dinner and retired without lighting
his candle. George William put on a new pink necktie and his
beloved silk hat, and went about, stepping high like one of his white
horses, but casting wary glances abroad for the appearance of one
Morosin’ Jones, who was coy and fidgety and could perforate a
dollar at one hundred feet.
In Paradise Bar every game was settled by the best two out of
three. Life was too feverish and too short to await three out of five,
and it was against the principles of the camp to leave any questions
undecided. Therefore, it was tacitly understood that the winner of the
next race would be the standard of comparison thereafter in matters
pertaining to travel. Other stage lines would be second-class,
ranking just above a mule train. There was another reason: Paradise
Bar was exceedingly fond of excitement, but it had no mind to risk its
neck in stage racing down the mountain-side forever and ever;
precipices yawned too many invitations. The personal feeling and
the betting both heavily favored Uncle Hank, both gratifying and
troubling to him.
There is little doubt that in the third race, under fair conditions,
Uncle Hank would have won; he would either have won or gone over
a precipice. But Rome, who had never before been known to have
anything the matter with him save an abnormal appetite for grain, fell
slightly lame. All day before the race, Uncle Hank worried over this,
all night he tossed in his blankets, and was only partly relieved the
next day when Rome appeared again to be all right, and ate hay as if
under the impression that the sun was shining and there was plenty
more being made. The last two days had greatly changed Uncle
Hank; he carried his head so that his beard touched his breast; his
hat was slouched low over his eyes; he kept his hands in his pockets
and spoke in monosyllables. He ate little and had a far-away look in
his blue eyes. He saw his fame departing, his reputation collapsing,
all that a man may build in this life, whether he creates empires or
digs post-holes, crumbling—the reputation of “being onto his job.”
The next morning with the fear of that lameness in his heart, Uncle
Hank hitched up and drove down the main street. He saw the yellow
stage also ready. There was no evidence of lameness in Rome as
he drove up to the door of the express office, nor when the stage
stopped at the Record Nugget for the hotel passengers. Uncle
Hank’s despondent face became more cheerful; he looked older and
grayer and even bent a little that morning, but he climbed up on the
box with his old-time energy. His courage and spirit were never to be
doubted; only that lameness in Rome worried him. He gathered up
the lines and loosened his whip; but the four did not go with their
accustomed dashing display. Instead there was confusion and
hesitation; in fifteen yards the slight lameness of the right wheel
horse was apparent, and Uncle Hank drew up. He dropped the lines,
and for a moment his face was in his hands.
The other stage had gone. Nothing could ever convince the public
satisfactorily, he thought, that after starting he had not given up the
race through fear. The limp was scarcely apparent. He perhaps
would not have noticed it for some miles had it not been for his
haunting dread and the false start. Yet he knew what it would mean
before the level was reached—a steep down grade and he would
have to go walking into Meadow Lark, a loser by an hour.
Uncle Hank, a broken old man, climbed down from the stage.
“Take ’em, George,” he said to the hostler. “There won’t be no stage
down to-day.” He said no more, but passed amid a dead silence
along the road through the population of Paradise Bar which had
turned out to see the beginning of the deciding race. Some guessed
at the reason; and to all it became apparent when the horses were
taken back to the stable and carefully examined. That day Uncle
Hank did not appear, nor the next; So Bob Allen went up to his cabin
in the evening and, receiving no response to his knocking, kicked
open the door and went in. Uncle Hank lay in his bunk, his face to
the wall. To Bob’s expressions of sympathy and encouraging
remarks, he made no reply; they were to him as the expressions
engraved on tombstones, and but added bitterness now. To his
arguments, Uncle Hank vouchsafed single words in return, and
never turned his face from the wall. From sympathy to argument,
from argument he drifted into bulldozing; alluded to Uncle Hank as a
man afraid of things, among which he specified a large number in
language that I will not reproduce; and when three connected words
was the most he could get out of Uncle Hank even by this, Bob knew
the case was desperate, and retired, defeated.
The friends of Uncle Hank, the entire population of Paradise Bar,
gravely discussed the situation. It was unanimously decided that the
yellow stage should thereafter stop outside of the camp limits, and
Morosin’ Jones publicly announced, his shoulders working up and
down most nervously, that George William would immediately cease
from wearing stand-up collars and red neckties; he would come into
camp with a slouch hat, a flannel shirt and teamster’s warranted-to-
wear gloves—or it was quite likely he would never go out again. This
statement met with the silent approval of the entire assemblage; and
George William, hearing of it, puzzled and bewildered, wisely
refrained from coming into the camp limits at all, but remained by the
stage. He explained in Meadow Lark that Paradise Bar had gone
crazy; and a cheerful miner from that camp acquiesced, but added
that some of the lunatics were not yet corralled, but still straying
about; and said it looking so significantly at George William that the
latter went home and hunted up a flannel shirt at once.
The next morning a committee waited on Uncle Hank, prepared
with arguments that would show him the error of broken-heartedness
—the easiest thing in the world to cure if its victims would but live to
tell us of it. Uncle Hank still lay with his face to the wall, and in a little
while the news was abroad in the camp that Uncle Hank, still with his
face to the wall, had resolutely died. It was a gray day in Paradise
Bar; the melodion in the Red Light was hushed; friends nodded
instead of speaking as they passed by; the camp began to realize
what it had lost. It was determined, as a last mark of the camp’s
esteem for Uncle Hank, to make the journey to the place of the final
tie-up simple but impressive. No formal meeting was held; the boys
just gathered together and acted on a common idea. The whole
camp would be in the procession, and they would go down to
Meadow Lark over the old familiar road. Uncle Hank’s stage carrying
the old stage-driver, would be at the head, of course; then there was
an awkward pause. More than one felt that it would add to the dignity
of the occasion to have two stages, but finally, when Major Wilkerson
arose and suggested that the Gray Eagle stage, carrying leading
citizens, be placed next, there was a murmur of dissent. Then Bob
Allen arose in his place and made the only known speech of his life:
“Friends, you are on the wrong trail and will hit a blind canyon,
certain. Of course we should have the other stage, and Pike to drive
it. Uncle Hank wasn’t the kind of a man to carry jealousy with him
into camp. ’Twasn’t being beat by Pike that broke Uncle Hank’s
heart; it was partly p’haps being beat at all, and partly, to my way of
thinkin’, because Paradise Bar didn’t stand behind him. That was the
main reason, gentlemen; he just died of pure lonesomeness. When
this yaller ve-hicle comes into camp, does we say to it: ‘You’re purty
and you’re new, and probably your springs is all right and maybe
your road; but you might jest as well pass on. Do you observe this
old stage with its paint wore off and its bullet holes? Do you see that
it’s down a little on one side and some of the spokes is new and
some are old? Do you know that these four old hosses have been
whoopin’ her up for Paradise Bar and for nothin’ else these ten years
—and a sunshiny day and one chuck full of snow and sleet was all
the same to them? Be you aware that this is our Uncle Hank, and
that he has been workin’ our lead for us these fifteen years, and
never lost a dollar or a pound of stuff or spilled a passenger, or
asked one of the boys to hoof it because he hadn’t no dinero? Those
bullet holes—men behind masks made ’em, but Uncle Hank never
tightened a ribbon for the whole caboodle. The paint’s been knocked
off that stage in our service, and it’s ours. Therefore, though you be
yaller and handsome, with consid’ble silver plate, we can’t back you
against our own flesh and blood. And that settles it.’ Did we talk that
way, boys? No, we jest stood off and gambled on the result as if
Uncle Hank was a travelin’ stranger ’stead of the best friend we had.
We stood off impartial like and invited the white hoss outfit to git in
and win if it could. And now, gentlemen, have we got the nerve to
dynamite this opposition stage line, when the whole gang of us ought
to be blown sky high?
“Uncle Hank wouldn’t have had it so. He didn’t cherish any ill
feeling pussonly against anybody; whatever he said was because
they was takin’ away from him what he had worked all his life for. He
wasn’t jealous of George William, but of him as a stage driver,
because we made him so. Boys, he loved us and was mighty proud
of our regard—and we didn’t show it in the time of trial. And he’s
gone over the great divide with tears in his eyes, and we are to
blame. Who among any of us poor fools has a right to say that the
other stage shouldn’t follow?”
 Bob sat down amid absolute silence, wiping his face vigorously.
Major Wilkerson rose to his feet. “I renew my suggestion,” said he,
“that we have the Gray Eagle stage. I think you’ll all agree that Bob’s
right.”
Morosin’ Jones rose from his stump, suffused with emotion. “In
course he’s right,” he said, huskily, “but the stage ou’t to be painted
black.” A murmur of assent greeted this speech.

The day was beautiful. The procession went slowly down the old
stage road, past Lime Point, through the Roaring River canyon,
beyond up Reddy’s grade, over the First Summit and then through
Little Forest to the watering-place at the head of the last canyon.
Every stream, every tree, every rock along the road was known to
Uncle Hank. He was going home over a familiar way. The pine trees,
with their somber green, were silent; the little streams that went
frolicking from one side of a canyon to another seemed subdued; it
was spring, but the gray squirrels were not barking in the tree-tops,
and the quail seemed to pipe but faintly through the underbrush. The
lupines and the bluebells nodded along the way; the chipmunks
stood in the sunlight and stared curiously.
All would have gone well had not George William Pike been a man
without understanding—and such a man is beyond redemption. He
did not appreciate the spirit of the invitation to join in this last simple
ceremony in honor of Uncle Hank. He accepted it as an apology
from Paradise Bar and growled to himself because of the absurd
request to paint the coach black—which he would not have done
except for an order from the superintendent, who was a man of
policy. A year could have been wasted in explaining that the
invitation was an expression of humility and of atonement for the
camp’s treatment of its own. So he came and wore his silk hat and
his red necktie, and Morosin’ Jones almost had a spasm in
restraining himself.
Down the mountain-side they went, slowly and decorously.
Nothing eventful happened until the mouth of the canyon was
cleared, and then George William became impatient. He could not
understand the spirit of the occasion. Meadow Lark and supper were
a long way off, and the luncheon at Half-Way House had been light.
So he began making remarks over his horses’ heads with the
intention of hurrying up Gregg, who was driving the old stage. “Well
fitted for this kind of work, those horses, ain’t they?” he said. “Seems
curious they were ever put on the stage.” Gregg said nothing, but
tightened rein a bit. “Where will we stop for the night?” asked George
William presently, flicking the off leader’s ear with his whip.
Gregg turned around angrily. “If you don’t like the way this thing is
bein’ done, you can cut and go on in town alone; but if you don’t
keep your mouth closed there’ll be trouble.”
“I don’t want to go into town alone,” rejoined George William
pleasantly, “but I reckon we’d go in better fashion if we was at the
head of this percession.”
“Maybe you’d better try it,” said Gregg, reddening, and thereupon
George William turned out his four white horses and his black stage,
without saying anything to his two passengers, and proceeded to go
around. Gregg gathered in the slack in his reins. “Go back!” he
roared. But Pike, swinging wide to the right to avoid the far-reaching
whip, went on. Nebuchadnezzar pricked up his ears. Rome looked
inquiringly at Athens, and Moloch snorted indignantly. Athens’
expression said very plainly: “Are we at our time of life going to
permit four drawing-room apologies for horses and a new-fangled
rattletrap to pass us on our own road?” The negative response could
be seen in the quiver that ran down each horse’s back. The leaders
gently secured their bits between their teeth. So absorbed was
Gregg in the strange actions of George William that he paid little
attention to his own horses.
Up and down the line behind him men were waving and
gesticulating and shouting. “Don’t let him pass you!” yelled
Wilkerson. That instruction ran up and down the line, clothed in a
variety of picturesque and forcible utterances. But no instruction was
needed by the horses in front of Gregg. They understood, and
scarcely had the other stage turned into the main road ahead when
they at one jump broke from a walk into a gallop. George William
saw and gave his four the rein and the whip. Glancing back, Gregg
watched the whole procession change from a line of decorous
dignity to one of active excitement. Dust began to rise, men on
horseback passed men on mules; men in buckboards passed men
on lumber wagons. George William held the road, and with it a great
advantage. To pass him it would be necessary to go out among the
rocks and the sage-brush, and the white four were racing swiftly,
rolling out behind them a blinding cloud of dust. Gregg set his teeth,
and spoke encouragingly to his horses. George William turned and
shouted back an insult: “You needn’t hurry; we’ll tell them you’ll be
there to-morrow. ’Tend to your new business; there is nothing in the
other for you. We’re going into town first.”
“Maybe,” said Gregg grimly—and loosened his whip. The four
lifted themselves together at its crack; in another half mile they were
ready to turn out to go around. Gregg watched for a place anxiously.
Brush and boulders seemed everywhere, but finally he chose a little
sandy wash along which ran the road for a way.
Turning out he went into the sand and lost ten yards. He heard
George William laugh sarcastically. But the old stage horses had
been in sand before, and had but one passenger besides their driver.
In a little while they were abreast the leaders, and here they stayed
and could gain no farther. For George William laid on the lash, and
the road was good. On they went, the one stage running smoothly
on the hard road, the other swaying, bounding, rocking, among the
rocks and gullies. A little while they ran thus, and then the road
began to tell. Pike shouted triumphantly. Gregg, with despair in his
heart, watched with grief the loss of inch after inch. “What can I do?”
he groaned—and turning, he found himself face to face with Uncle
Hank. The reins dropped from his nerveless hands, and his face
went white.
“Give me a hand!” shouted Uncle Hank, and over the swinging
door he crawled on the seat—and Gregg perceived he was flesh and
blood. The old fire was in his eyes, he stood erect and loosened his
whip with his left hand easily as of yore. And then something else
happened. The line behind was scattered and strung out to perhaps
a mile in length, but every eye was on the racing coaches. They saw
the familiar figure of the old stage driver, saw him gather up the
reins; saw and understood that he had come back to life again, and
up and down that line went a cheer such as Paradise Bar will seldom
hear again. Uncle Hank sent the whip waving over the backs of his
beloved. “Nebuchadnezzar! Moloch! Rome! Athens! Come! No
loafing now. This is our road, our stage—and our camp is shouting.
Don’t you hear the boys! Ten years together, you’n me. Whose dust
have we taken? Answer me! Good, Athens, good—steady, Rome,
you blessed whirlwind. Reach out, Neb—that’s it—reach. Easy,
Moloch, easy; never mind the rocks. Yo-ho! Yo-ho-o-o! In we go!”
At the first words of the master, the four lifted themselves as if
inspired. Then they stretched lowly and ran; ran because they knew
as only horses can know; ran as his voice ran, strong and straight. In
three minutes they turned in ahead of the white horses and the
funeral stage. The race was practically won. Uncle Hank with the
hilarious Gregg alongside, drove into Meadow Lark ten minutes
ahead of all others—and Meadow Lark in its astonishment almost
stampeded. After a while the rest of Paradise Bar arrived, two of its
leading citizens, who had started out in a certain black stage drawn
by four horses, coming in on foot. They were quite non-committal in
their remarks, but it was inferred from a few words dropped casually
that, after the stage stopped, they lost some time in chasing the
driver back into the foothills; and it was observed that they were
quite gloomy over their failure to capture him.
“Oh, never mind,” said Morosin’ Jones, in an ecstasy of joy.
“What’s the good of cherishin’ animosity? Why, for all I care he kin
wear that red necktie now if he wants to”—then after a pause—“yes,
and the silk hat, too, if he’s bound to be a cabby.”
Uncle Hank was smiling and shaking hands with everybody and
explaining how the familiar motion of the stage had brought him out
of his trance. “I’m awful glad to have you here, boys; mighty glad to
see you. The hosses and me are proud. I’ll admit it. We oughter be.
Ain’t Paradise Bar with us, and didn’t we win two out of three, after
all?”—From The Black Cat, June, 1902, copyright by Short Story
Publishing Co., and used by their kind permission.
 HUMOROUS DIALECT SELECTIONS IN POETRY

PLAIN LANGUAGE FROM TRUTHFUL JAMES

POPULARLY KNOWN AS THE HEATHEN CHINEE
TABLE MOUNTAIN, 1870
By Bret Harte

Which I wish to remark—

And my language is plain—
That for ways that are dark
And for tricks that are vain,
The heathen Chinee is peculiar,
Which the same I would rise to explain.

Ah Sin was his name;

And I shall not deny,
In regard to the same,
What that name might imply;
But his smile it was pensive and childlike,
As I frequent remarked to Bill Nye.

It was August the third,

And quite soft was the skies;
Which it might be inferred
That Ah Sin was likewise;
Yet he played it that day upon William
And me in a way I despise.

Which we had a small game,

And Ah Sin took a hand:
It was Euchre. The same
He did not understand;
But he smiled as he sat by the table,
With the smile that was childlike and bland.
Yet the cards they were stocked
In a way that I grieve,
And my feelings were shocked
At the state of Nye’s sleeve:
Which was stuffed full of aces and bowers,
And the same with intent to deceive.

But the hands that were played

By that heathen Chinee,
And the points that he made,
Were quite frightful to see—
Till at last he put down a right bower,
Which the same Nye had dealt unto me.

Then I looked up at Nye,

And he gazed upon me;
And he rose with a sigh,
And said, “Can this be?
We are ruined by Chinese cheap labor,”—
And he went for that heathen Chinee.

In the scene that ensued

I did not take a hand,
But the floor it was strewed
Like the leaves on the strand
With the cards that Ah Sin had been hiding,
In the game “he did not understand.”

In his sleeves, which were long,

He had twenty-four packs—
Which was coming it strong,
Yet I state but the facts;
And we found on his nails, which were taper,
What is frequent in tapers—that’s wax.

Which is why I remark,

And my language is plain,
That for ways that are dark,
 And for tricks that are vain,
The heathen Chinee is peculiar—
Which the same I am free to maintain.

—Copyright by Houghton Mifflin & Co., Boston, and used by their

kind permission.

PARODY ON “THAT HEATHEN CHINEE”

[The following remarkable parody was written by the Reverend
Father Wood, Professor of English Literature at St. Ignatius College,
San Francisco. For the annual exercises of his class, a debate was
to be held as to the respective abilities of the various authors and
poets studied during the year. Each had his advocates and
strenuous adherents. The final test adopted was that each adherent
should write out Bret Harte’s Heathen Chinee in the form his favorite
author would have followed. These verses are after the style of
Samuel Lover, the Irish poet.]

Did ye hear of the haythen Ah Sin,

Maginn?
The bouldest of bould Chaneymin,
Maginn?
Oh. He was the bye
Who could play it on Nye
And strip him as aisy as sin,
To the skin.
Oh. ’Twas he was the gossoon to win.

It was euchre we’d play, me and Nye,

Me bye!
An’ the stakes was uproariously high,
Me bye!
Nye’s sleeves they was stocked,
An’ me feelin’s was shocked,
But never a whisper said I—
You know why!
For Bill is outrageously sly!

The game to the haythen was new,

Aboo!
He didn’t quite know what to do,
Aboo!
With the cyards in his hand
He smiled childlike and bland,
And asked us of questions a few,
Wirrastheu!
Which we answered as bad as we knew.

We tuk it the game was our own,

Ochone!
We’d pick him as cleane as a bone,
Ochone!
But the hands that he played
An’ the p’ints that he made,
Made me feel like a babby ungrown,
I must own!
An’ dull as I’d shwallowed a stone!

Nye wud give him a three or a four,

Asthore!
But niver a better cyard more.
Asthore!
Yet he’d dhrop down a king
Just the aisest thing,
An’ jokers an’ bowers galore
By the score!
You may lay he’d been there before!

He was happy as haythen cud be,

Machree!
His manner surprisingly free,
Machree!
But William looked sour
When he played the right bower
Which William had dealt out to me,
Do ye see!
For to euchre the haythen Chinee.

Then William got up in a stew,

Hurroo!
An’ shlated Ah Sin black and blue,
Hurroo!
An’ shuk out of his sleeve,
I’m not makin’ believe,
Of picture cyards quite a good few!
It is thrue—
This shtory I’m tellin’ to you.

We had danced to the haythen’s own tune.

Aroon!
Oh! It’s lucky we got out so soon,
Aroon!
He had twenty-four packs,
On his fingers was wax—
An’ this in Tim Casey’s saloon!
The ould coon!
How he played us that warm afternoon,
Aroon!

KENTUCKY PHILOSOPHY
By Harrison Robertson

You Wi’yam, cum ’ere, suh, dis instunce. Wu’ dat you got under dat
box?
I do’ want no foolin’—you hear me? Wut you say? Ain’t nu’h’n but
rocks?
’Peahs ter me you’s owdashus p’ticler. S’posin’ dey’s uv a new kine.
I’ll des take a look at dem rocks. Hi yi! der you think dat I’s bline?
I calls dat a plain water-million, you scamp, en I knows whah it
growed;
It come fum de Jimmerson cawn fiel’, dah on ter side er de road.
You stole it, you rascal—you stole it! I watched you fum down in de
lot.
En time I gets th’ough wid you, nigger, you won’t eb’n be a grease
spot!

I’ll fix you. Mirandy! Mirandy! go cut me a hick’ry—make ’ase!

En cut me de toughes’ en keenes’ you c’n fine anywhah on de place.
I’ll larn you, Mr. Wi’yam Joe Vetters, ter steal en ter lie, you young
sinner,
Disgracin’ yo’ ole Christian mammy, en makin’ her leave cookin’
dinner!

Now ain’t you ashamed er yo’se’f, sur? I is. I’s ’shamed you’s my
son!
En de holy accorjan angel he’s ’shamed er wut you has done;
En he’s tuk it down up yander in coal-black, blood-red letters—
“One water-million stoled by Wi’yam Josephus Vetters.”

En wut you s’posen Brer Bascom, yo’ teacher at Sunday school,

’Ud say ef he knowed how you’s broke de good Lawd’s Gol’n Rule?
Boy, whah’s de raisin’ I give you? Is you boun’ fuh ter be a black
villiun?
I’s s’prised dat a chile er yo’ mammy ’ud steal any man’s water-
million.

En I’s now gwiner cut it right open, en you shain’t have nary bite,
Fuh a boy who’ll steal water-millions—en dat in de day’s broad light
—
Ain’t—Lawdy! its green! Mirandy! Mi-ran-dy! come on wi’ dat switch!
Well, stealin’ a g-r-e-e-n water-million! who ever yeered tell er des
sich?

Cain’t tell w’en dey’s ripe? W’y, you thump ’um, en we’n dey go pank
dey is green;
But w’en dey go punk, now you mine me, dey’s ripe—en dat’s des
wut I mean.
En nex’ time you hook water-millions—you heered me, you ign’ant,
you hunk,
Ef you doan’ want a lickin’ all over, be sho dat dey allers go “punk!”

—Harper’s Magazine.

OH, I DUNNO!
Anonymous

Lindy’s hair’s all curly tangles, an’ her eyes es deep en’ gray,
En’ they allus seems er-dreamin’ en’ er-gazin’ far away,
When I ses, “Say, Lindy, darlin’, shall I stay, er shall I go?”
En’ she looks at me er-smilin’, en’ she ses, “Oh, I dunno!”

Now, she knows es I’m er-lovin’ her for years an’ years an’ years
But she keeps me hesitatin’ between my doubts an’ fears;
En’ I’m gettin’ pale and peaked, en’ et’s jes from frettin’ so
Ovur Lindy with her laughin’ an’ er-sayin’, “I dunno!”

T’other night we come frum meetin’ an’ I asks her fer a kiss,
En’ I tells her she’s so many that er few she’ll never miss;
En’ she looks up kinder shy-like, an’ she whispers sorter low,
“Jim, I’d ruther that you wouldn’t, but—er well—Oh, I dunno!”

Then I ses, “Now see here, Lindy, I’m er-wantin’ yer ter state
Ef yer thinks yer’ll ever love me, an’ if I had better wait,
Fer I’m tired of this fulein’, an’ I wants ter be yer beau,
An’ I’d like to hear yer sayin’ suthin’ else but I dunno!”

Then I puts my arm around her an’ I holds her close and tight,
En’ the stars away up yander seems er-winkin’ et th’ sight,
Es she murmurs sof’ an’ faintly, with the words er-comin’ slow,
“Jim, I never loved no other!” Then I ses, “Oh, I dunno!”
 RORY O’MORE
By Samuel Lover

Young Rory O’More courted Kathleen Bawn,

He was bold as a hawk, she as soft as the dawn;
He wish’d in his heart pretty Kathleen to please,
And he thought the best way to do that was to tease.
“Now, Rory, be aisy,” sweet Kathleen would cry,
(Reproof on her lip, but a smile in her eye),
“With your tricks I don’t know, in troth, what I’m about;
Faith, you’ve teased till I’ve put on my cloak inside out.”
“Oh! Jewel,” says Rory, “that same is the way
You’ve thrated my heart for this many a day;
And ’tis plazed that I am, and why not, to be sure?
For ’tis all for good luck,” says bold Rory O’More.

“Indeed, then,” says Kathleen, “don’t think of the like,

For I half gave a promise to sootherin’ Mike;
The ground that I walk on he loves, I’ll be bound—”
“Faith,” says Rory, “I’d rather love you than the ground.”
“Now, Rory, I’ll cry if you don’t let me go;
Sure I drame ev’ry night that I’m hatin’ you so!”
“Oh,” says Rory, “that same I’m delighted to hear,
For drames always go by conthraries, my dear;
Oh! jewel, keep dramin’ that same till you die,
And bright mornin’ will give dirty night the black lie!
And ’tis plazed that I am, and why not, to be sure?
Since ’tis all for good luck,” says bold Rory O’More.

“Arrah, Kathleen, my darlint, you’ve tazed me enough,

Sure I’ve thrashed for your sake Dinny Grimes and Jim Duff;
And I’ve made myself drinkin’ your health quite a baste,
So I think after that, I may talk to the priest.”

Then Rory, the rogue, stole his arm ’round her neck,
So soft and so white, without freckle or speck,
And he looked in her eyes that were beaming with light,
And he kissed her sweet lips;—don’t you think he was right?
“Now, Rory, leave off, sir; you’ll hug me no more.
That’s eight times to-day you have kiss’d me before.”
“Then here goes another,” says he, “to make sure,
For there’s luck in odd numbers,” says Rory O’More.

HOWDY SONG
By Joel Chandler Harris

It’s howdy, honey, when you laugh,

An’ howdy when you cry,
An’ all day long it’s howdy—
I never shall say good-by.

I’m monst’us peart myse’f, suh,

An’ hopin’ the same fer you,
An’ when I ketch my breff, suh,
I’ll ax you howdy-do!

It’s howdy, honey, when you sleep,

It’s howdy, when you cry;
Keep up, keep up the howdyin’;
Don’t never say good-by!

I’m middlin’ well myse’f, suh,

Which the same I hope fer you;
Ef you’ll let me ketch my breff, suh,
I’ll ax you howdy-do!

“IMPH-M”
Anonymous

When I was a laddie lang syne at the schule,

The maister aye ca’d me a dunce an’ a fule;
For somehoo his words I could ne’er understand’,