Sixth Edition

Strategic Management
Richard Lynch

PEARSON
Hariow, England London New York Boston San Francisco * Toronto Sydney
Auckland Singapore Hong Kong Tokyo Seoul Taipej New Delhi
Cape Town Sao Paulo Mexico City Madrid Amsterdam Munich Paris Milan

Contents

About the sixth edition

How to use this book
Guided tour
Guide to the main focus of case studies
Acknowledgements
Publisher's acknowledgements

XIII

xix
xx
xxiii
xxvi
xxix

2.5 The purpose of the organisation:

stakeholders, ethics and green strategy
Case study 2.5
Critical reflection
Summary
Questions
,
Further reading
Notes and references

59
61
64
65
66
66
67

Parti
INTRODUCTION

Part 2
STRATEGIC ANALYSIS AND PURPOSE

Chapter 1
Strategic management
Introduction
Case study 1.1
1.1 What is strategic management?
1.2 The main topics covered in strategy
Case study 1.2
1.3 Core areas of strategic management
1.4 Context, content and process
1.5 Process: linking the three core areas
1.6 Green strategy"
1.7 Strategy development in public and
non-profit organisations
1.8 International dimensions in strategic /'
management
Case study 1.3
Critical reflection
Summary
Questions
Further reading
Notes and references

Chapter 2
A review of theory and practice

2.1

2.2

2.3

2.4

Introduction
Case study 2.1
Prescriptive strategic management in
theory and practice
Case study 2.2
Emergent strategic management in theory
and practice
Case study 2.3
Some prescriptive theories of strategic
management
Case study 2.4
Some emergent theories of strategic
management

4
FT

5
7
9
13
15
17
19
22

Chapter 3
Analysing the strategic environment

40
43

Introduction
Case study 3.1
3.1 Exploring the competitive environment
3.2 Strategic environment - the basics
3.3 Degree of turbulence in the environment
3.4 Green strategy
3.5 Analysing the general environment
Case study 3.2
3.6 Analysing the stages of market growth
Case study 3.3
3.7 Key factors for success in an industry
3.8 Analysing the competitive industry
environment - the contribution of
Porter
3.9 Analysing the co-operative environment
3.10 Analysing one or more immediate
competitors in depth
3.11 Analysing the customer and market
segmentation
Case study 3.4
3.12 Conclusions
Case study 3.5
Critical reflection
Summary
Questions
Further reading
Notes and references

45
52

Chapter 4
Analysing resources and capabilities

24
25
26
28
29
30
30
31

33
33
34
35
38

53

Introduction
Case study 4.1

72
73
73
74
77
78
80
82
87
88
91
95

98
104
107
109
112
115
116
118
119
120
121
121

123
123
124
VII

CONTENTS

4.1 Analysing resources and capabilities

4.2 Why does an organisation possess any
resources at all? The make-or-buy
decision
Case study 4.2
4.3 Resource analysis and adding value
4.4 Adding value: the value chain and the
value system - the contribution of Porter
4.5 Adding value: Green strategy and the
value chain
Case study 4.3
,
4.6 Resource analysis and competitive
advantage - the resource-based view
4.7 Identifying which resources and
capabilities deliver sustainable
competitive advantage
4.8 Resource and capability analysis improving competitive advantage
Case study 4.4
Critical reflection "
Summary
Questions
Further reading
Notes and references

Chapter 5
Strategy dynamics

5.1

5.2

5.3
5.4

5.5
5.6
5.7
5.8

viii

Introduction
Case study 5.1
Interpretive dynamics: the changing
purpose of the organisation
Case study 5.2
Interpretive dynamics: the organisation's
changing and uncertain environment
Case study 5.3
Interpretive dynamics: fast-moving
markets
Interpretive dynamics: resource
development
Case study 5.4
Proactive dynamics: developing
a dynamic business framework
Proactive dynamics: aggressive
competitive strategies
Proactive dynamics: developing
co-operation
Proactive dynamics: using game
theory
Critical reflection
Summary
Questions
Further reading
Notes and references

127

132
134
136
137
143
146
150

157
162
165
168
168
170
170
171

173
173
174
175
178

Chapter 6
Prescriptive purpose delivered through
mission, objectives and ethics

6.1
6.2
6.3
6.4
6.5
6.6
6.7

Chapter 7
Purpose emerging from knowledge,
technology and innovation

7.1
7.2
7.3

181
186
7.4
188
7.5
191
197
200

Introduction
Case study 6.1
Shaping the purpose of the organisation
Developing a strategic vision for the future
Case study 6.2
Stakeholder power analysis
Case study 6.3
Corporate governance and the purpose
of the organisation
Purpose shaped by ethics and corporate
social responsibility
Developing the mission
Case study 6.4
Developing the objectives
Critical reflection
Summary
Questions
Further reading
Notes and references

Introduction
Case study 7.1
Understanding and measuring knowledge
Case study 7.2
Knowledge creation and purpose
Case study 7.3
Using technology to develop purpose
and competitive advantage
Case study 7.4
Innovation and purpose
Case study 7.5
How to innovate: the 'ideas' process
Critical reflection
Summary
Questions
Further reading
Notes and references

220
220
221
223
226
229
232
235
238
243
247
250
252
255
256
257
257
258

260
260
261
262
268
270
275
276
281
283
286
289
294
294
295
296
296

203
208
211
214
214
216
217
217

Part 3
DEVELOPING THE STRATEGY
Chapter 8
Developing business-level strategy options 300
Introduction
Case study 8.1

300
302

CONTENTS

8.1 Purpose and the SWOT analysis - the

contribution of Andrews
8.2 Environment-based options: generic
strategies - the contribution of Porter
Case study 8.2
Case study 8.3
8.3 Environment-based strategic options:
the market options matrix
8.4 Environment-based strategic options:
the expansion method matrix
Case study 8.4
8.5 Resource-based strategic options:
the value chain
8.6 Resource-based strategic options:
the resource-based view
8.7 Resource-based strategic options:
cost reduction
8.8 Options related to green strategy
Critical reflection
Summary
Questions
Further reading
Notes and references
Chapter 9
Developing corporate-level strategy
options
Introduction
Case study 9.1
9.1 Corporate-level strategy: the benefits
and costs of diversifying
9.2 Corporate options: degrees of
diversification
9.3 Corporate strategy and the role of
the centre - the principle of parenting
Case study 9.2
9.4 Corporate strategy: decisions about the
company's diversified portfolio of
products
Case study 9.3
9.5 The tools of corporate-level options:
from acquisitions to restructuring
Critical reflection
Summary
Questions
Further reading
Notes and references
Chapter 1 0
Strategy evaluation and development:
the prescriptive process
Introduction
Case study 10.1

304
305
310
312
315
320
324
328
330
333
338
339
340
341
341
342

10.1 Prescriptive strategy content: evaluation

against six criteria
Case study 10.2
10.2 Strategy evaluation: procedures and
techniques
10.3 Applying empirical evidence and
guidelines
Case study 10.3
10.4 The classic prescriptive model of
strategic management: exploring
the process
10.5 Evaluating and selecting green strategy
options
Case study 10.4
Critical reflection
Summary
Questions
Appendix
Further reading
Notes and references

Chapter 1 1
Finding the strategic route forward:
mainly emergent approaches

344
344
345

11.1

348

11.3

11.2

352
11.4
353
356
11.5

360
365
369
371
372
373
373
374

376
376
377

11.6

Introduction
Case study 11.1
The importance of strategy context
Case study 11.2
The survival-based strategic route
forward
The uncertainty-based strategic route
forward
Case study 11.3
The network-based strategic route
forward
Case study 11.4
The learning-based strategic route
forward
International considerations
Critical reflection
Summary
Questions
Further reading
Notes and references

Chapter 12
Organisational structure, style and
people issues
Introduction
Case study 12.1
12.1 Strategy before structure?
12.2 Building the organisation's structure;
basic principles

379
385
387
393
397

402
405
408
412
413
414
415
415
416

418
418
419
420
423
426
428
431
436
440
441
448
450
450
452
452
453

455

455
456
459
463
IX

CONTENTS

12.3 The choice of management style

and culture
Case study 12.2
12.4 Types of organisational structure
12.5 Organisational structures for innovation
Case study 12.3
12.6 Motivation and staffing in strategy
implementation
Critical reflection
Summary
Questions
Further reading
Notes and references

468
473
476
481
484
486
488
488
490
490
490

14.4 Strategy implications: communicating

with customers and stakeholders
14.5 Strategy implications: strategic pricing
and value for money
14.6 Strategy implications: quality objectives
and customers
Case study 14.3
Critical reflection
Summary
Questions
Further reading
Notes and references

Chapter 15
Managing strategic change

Part 4
THE IMPLEMENTATION PROCESS
Chapter 13
Implementing and controlling the
strategic plan

13.1
13.2

13.3
13.4
13.5

13.6

Introduction
Case study 13.1
The nature and limitations of the
implementation process
Objectives; task setting and
communicating the strategy
Case study 13.2
Resource allocation
Case study 13.3
Information, monitoring and control
The Balance Scorecard: the contribution
of Kaplan and Norton
Case study 13.4
Prescriptive strategic planning
Critical reflection
Summary
Questions
Further reading
Notes and references

Chapter 14
Developing and implementing
customer-driven strategy

15.1
15.2

494

15.3

494
495
15.4
497
502
505
508
509
512
514
519
520
525
525
527
527
528

529

529
Introduction
530
Case study 14.1
14.1 Customers and customer-driven strategy the contribution of Theodore Levitt
532
14.2 Customer profiling and sustainable
competitive advantage
535
Case study 14.2
540
14.3 Strategy implications: analysing and
implementing branding and reputation
542

15.5

Introduction
Case study 15.1
The basic concept of strategic change
Analysing the causes of strategic change
Case study 15.2
Prescriptive approaches to managing
strategic change
Case study 15.3
Emergent approaches to managing
change
Case study 15.4
Developing a strategic change programme
Critical reflection
Summary
Questions
Further reading
Notes and references

544
546
550
553
557
557
559
559
559

561
561
562
564
568
569
574
577
578
583
586
590
590
592
592
593

Part 5
DIFFERENT STRATEGY CONTEXTS AND
BUILDING A COHESIVE STRATEGY
Chapter 1 6
Strategic leadership

16.1
16.2
16.3
16.4
16.5

Introduction
Case study 16.1
What is strategic leadership
What makes a successful leader?
Case study 16.2
How leaders shape organisations using
culture and style
How leaders cope with power
Case study 16.3
Successful strategic leadership
Critical reflection
Summary
Questions

596
596
597
599
600
605
608
614
616
619
622
622
623

CONTENTS

Further reading
Notes and references
Chapter 17
Entrepreneurial strategy

17.1
17.2

17.3

17.4

17.5

Introduction
Case study 17.1
Entrepreneurial strategy: theory and
practice
Entrepreneurial strategy: personal
aspects and risk taking
Case study 17.2
The four drivers of entrepreneurial
strategy: imagination, ideas, invention
and innovation
Entrepreneurial strategy: competitive
advantage and ownership
Case study 17.3
Implementing entrepreneurial strategy
Critical reflection
Summary
Questions
Further reading
Notes and references

Chapter 18
Government, public sector and
not-for-profit strategies

18.1
18.2

18.3
18.4
18.5

Introduction
Case study 18.1
/
Analysing the strategic environment
in public sector strategy
Analysing resources in the public and
not-for-profit sectors
Case study 18.2
Exploring the purpose of public and
not-for-profit organisations
Context, content and process in public
sector strategy
Implementation in public sector strategy
Case study 18.3
Critical reflection
Summary
Questions
Acknowledgements
Further reading
.
Notes and references

Chapter 19
International expansion and
globalisation strategies
Introduction
Case study 19.1

624
624

626
626
627
629
633
636
,
638
640
643
644
647
647
649
650
650

19.1 International expansion and globalisation:

their meaning and importance
Case study 19.2
19.2 World trade and the international
expansion strategies of companies
19.3 Influence of institutions involved in
international trade
Case study 19.3
19.4 International and global expansion
strategies: the company perspective
19.5 International and global expansion
strategies: organisation structures
19.6 Developing international relationships
such as alliances and joint ventures
Critical reflection
Summary
Questions
Further reading
Notes and references

Chapter 20
Building a cohesive strategy

20.1
20.2

652
652
654
656
662
667
669
671
674
676
681
681
684
684
684
685

687
687
688

20.3
20.4

Introduction
Case study 20.1
Cohesion in prescriptive and emergent
processes
Building a cohesive strategy - a worked
example
Case study 20.2
Developing the business model
Longer-term strategy issues
Case study 20.3
Critical reflection
.
Summary
Questions
Further reading
Notes and references

690
695
699
703
706
711
717
721
724
725
726
726
727

729
729
730
732
734
739
741
742
745
747
747
748
748
749

Part 6
INTEGRATIVE AND LONGER CASE STUDIES
How to analyse and prepare strategy cases
1 Europe's leading airlines: budget strategy
or bust?
2 Global beer and lager: exploring strategies
in a mature market
3 SABMiller: South Africa goes quietly global
4 Prescriptive and emergent strategy? Risks
and challenges for global car companies including green strategies
5 Competitive prescriptive strategy - the
battle between the top five car companies

752
754
761
765

769
776
XI

CONTENTS

6 Competitive and new entry strategies:

tricky time for Tata Motors
7 Strategic change: the rise and fall of
CEO Carly Fiorina at Hewlett-Packard
8 Strategy development: what can companies
learn from 'Chainsaw Al'?
9 Sorting out Sony: restoring the profits and
the innovative fire
10 Emergent strategy: what's the new
smart strategy for PCs, media tablets
and mobiles?
.

781
788

11 Public sector strategy: how Galileo

ended up in serious trouble
12 Emergent strategy: who will stop
Apple's dominance of the music
delivery business?

817

795
797

Glossary
Index

807

Supporting resources
Visit www.pearsoned.co.uk/lynch to find valuable online resources
Companion Website for students
Video summaries of each chapter
Videos to accompany the long case studies
Additional material, including further cases studies, questions and
checklists, to expand your knowledge and aid your understanding
Case Study Guide offering help with reading, analysing and presenting
cases
A searchable online glossary to explain key terms

For instructors
Complete, downloadable Instructor's Manual, including teaching notes
on the book and the case studies
A bank of additional case studies from the previous edition of the book
PowerPoint slides that can be downloaded and used as OHTs
For more information please contact your local Pearson Education sales
consultant or visit www.pearsoned.co.uk/lynch

XII

814

822
832