crafting and executing strategy
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THE QUEST FOR COMPETITIVE ADVANTAGE
Concepts and Cases
ITl
Arthur A. Thompson
The University of Alabama
Margaret A. Peteraf
Dartmouth College
John E. Gamble
University of South Alabama
A. J. Strickland III
The University of Alabama
McGraw-Hill
Irwin
I**
PART ONE Concepts and Techniques for Crafting and
Executing Strategy 1
Section A: Introduction and Overview
1 WHAT IS STRATEGY AND WHY IS IT IMPORTANT? 2
WHAT DO WE MEAN BY STRATEGY? 4
Strategy and the Quest for Competitive Advantage
Why a Company's Strategy Evolves over Time 8
5
A Company's Strategy Is Partly Proactive and Partly Reactive
8
A COMPANY'S STRATEGY AND ITS BUSINESS MODEL 10
WHAT MAKES A STRATEGY A WINNER? 12
WHY CRAFTING AND EXECUTING STRATEGY ARE IMPORTANT TASKS 12
Good Strategy + Good Strategy Execution = Good Management 13
THE ROAD AHEAD 13
ILLUSTRATION CAPSULE
1.1 McDonald's Strategy in the Quick-Service Restaurant Industry 6
1.2 Sirius XM and Over-the-Air Broadcast Radio: Two Contrasting Business
Models 11
2 CHARTING A COMPANY'S DIRECTION: ITS VISION, MISSION,
OBJECTIVES, AND'STRATEGY 18
WHAT DOES THE STRATEGY-MAKING, STRATEGY-EXECUTING PROCESS
ENTAIL? 19
TASK 1: DEVELOPING A STRATEGIC VISION, A MISSION STATEMENT, AND
'A SET OF CORE VALUES 2 0
Developing a Strategic Vision 21
Communicating the Strategic Vision 21
Developing a Company Mission Statement 24
Linking the Vision and Mission with Company Values 25
TASK 2: SETTING OBJECTIVES 27
TASK 3: CRAFTING A STRATEGY 31
Strategy Making Involves Managers at All Organizational Levels 31
A Company's Strategy-Making Hierarchy 32
Uniting the Strategy-Making Hierarchy 34
A Strategic Vision + Objectives + Strategy = A Strategic Plan 35
TASK 4 : EXECUTING THE STRATEGY 35
TASK 5: EVALUATING PERFORMANCE AND INITIATING CORRECTIVE
ADJUSTMENTS 36
CORPORATE GOVERNANCE: THE ROLE OF THE BOARD OF DIRECTORS
IN THE STRATEGY-CRAFTING, STRATEGY-EXECUTING PROCESS 37
O
O
>7(g^
THE QUEST FOR COMPETITIVE ADVANTAGE
Concepts and Cases
ITl
Arthur A. Thompson
The University of Alabama
Margaret A. Peteraf
Dartmouth College
John E. Gamble
University of South Alabama
A. J. Strickland III
The University of Alabama
McGraw-Hill
Irwin
I**
PART ONE Concepts and Techniques for Crafting and
Executing Strategy 1
Section A: Introduction and Overview
1 WHAT IS STRATEGY AND WHY IS IT IMPORTANT? 2
WHAT DO WE MEAN BY STRATEGY? 4
Strategy and the Quest for Competitive Advantage
Why a Company's Strategy Evolves over Time 8
5
A Company's Strategy Is Partly Proactive and Partly Reactive
8
A COMPANY'S STRATEGY AND ITS BUSINESS MODEL 10
WHAT MAKES A STRATEGY A WINNER? 12
WHY CRAFTING AND EXECUTING STRATEGY ARE IMPORTANT TASKS 12
Good Strategy + Good Strategy Execution = Good Management 13
THE ROAD AHEAD 13
ILLUSTRATION CAPSULE
1.1 McDonald's Strategy in the Quick-Service Restaurant Industry 6
1.2 Sirius XM and Over-the-Air Broadcast Radio: Two Contrasting Business
Models 11
2 CHARTING A COMPANY'S DIRECTION: ITS VISION, MISSION,
OBJECTIVES, AND'STRATEGY 18
WHAT DOES THE STRATEGY-MAKING, STRATEGY-EXECUTING PROCESS
ENTAIL? 19
TASK 1: DEVELOPING A STRATEGIC VISION, A MISSION STATEMENT, AND
'A SET OF CORE VALUES 2 0
Developing a Strategic Vision 21
Communicating the Strategic Vision 21
Developing a Company Mission Statement 24
Linking the Vision and Mission with Company Values 25
TASK 2: SETTING OBJECTIVES 27
TASK 3: CRAFTING A STRATEGY 31
Strategy Making Involves Managers at All Organizational Levels 31
A Company's Strategy-Making Hierarchy 32
Uniting the Strategy-Making Hierarchy 34
A Strategic Vision + Objectives + Strategy = A Strategic Plan 35
TASK 4 : EXECUTING THE STRATEGY 35
TASK 5: EVALUATING PERFORMANCE AND INITIATING CORRECTIVE
ADJUSTMENTS 36
CORPORATE GOVERNANCE: THE ROLE OF THE BOARD OF DIRECTORS
IN THE STRATEGY-CRAFTING, STRATEGY-EXECUTING PROCESS 37