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Saudi Electronic University Homework Help

Management Question

Description

Please read the :

General Instructions – PLEASE READ THEM CAREFULLY from the file attached and Avoid plagiarism

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 2
Strategic Management (MGT 401)
Due Date: 22/03/2025 @ 23:59
Course Name: Strategic Management

Student’s Name:

Course Code: MGT 401

Student’s ID Number:

Semester: Second

CRN: 24090
Academic Year:2024-25-2nd

For Instructor’s Use only
Instructor’s Name: Dr. Shahid Alam
Students’ Grade:
/10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY
•
•
•
•
•
•
•
•

Restricted – ‫مقيد‬

The Assignment must be submitted on Blackboard (WORD format only) via the
allocated folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention the question number clearly in their answers.
Late submissions will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answers must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.

Learning Outcomes:
CLO1

CLO4

Recognize the basic concepts and terminology used in Strategic Management.
Describe the different issues related to environmental scanning, strategy formulation, and strategy
implementation in diversified organizations.
Explain the contribution of functional, business, and corporate strategies to the organization’s competitive
advantage.
Distinguish between different types and levels of strategy and strategy implementation.

CLO5

Demonstrate how executive leadership is an integral part of strategic management.

CLO6

Communicate issues, results, and recommendations coherently, and effectively regarding appropriate strategies
for different situations.

CLO2
CLO3

Case study: TomTom Company

Assignment Question(s):
Read carefully case study No. 21 from your textbook (entitled ‘TomTom: New Competition
Everywhere! By Alan N. Hoffman) and briefly answer the following questions: (1 mark for each question)

1. What competitive strategy does TomTom company use?
2. Apply the five forces of M. Porter’s framework to analyze the industry to which TomTom company

belongs.
Detail the different functional strategies employed by this company.
Explain TomTom company’s relationship with its primary stakeholders.
Outline TomTom’s market position.
Identify the core competencies of this company
Discuss at least TWO strategic alliances (such as acquisitions, outsourcing, joint ventures, etc.)
utilized by this company Were they successful? Justify your answer.
8. What main challenges has TomTom company faced?
9. Evaluate the competitive advantage of TomTom in its market.
10. Suggest recommendations for TomTom company to enhance its competitive advantage.
3.
4.
5.
6.
7.

Notes.
▪
▪
▪
▪

Be brief while answering the questions.
Please do not copy/paste sentences from the case study text.
It is highly recommended to use the vocabulary/terminology used in your course of MGT401.
You do not need to use other references to answer the questions in this case; limit your answers to what is provided
in the studied case.

Good Luck

Restricted – ‫مقيد‬

Student’s Answers

1.
2.
…

Restricted – ‫مقيد‬

Strategic Management Model
Environmental
Scanning:

Strategy
Formulation:

Strategy
Implementation:

Evaluation
and Control:

Gathering
Information

Developing
Long-range Plans

Putting Strategy
into Action

Monitoring
Performance

External:
Opportunities
and Threats

Natural
Environment:
Resources and
climate

Societal
Environment:
General forces

Task
Environment:

Mission
Reason for
existence

Objectives
What
results to
accomplish
by when

Strategies
Plan to
achieve the
mission &
objectives

Policies
Broad
guidelines
for decision
making

Industry analysis

Programs
Activities
needed to
accomplish
a plan

Budgets
Cost of the
programs

Procedures
Sequence
of steps
needed to
do the job

Internal:
Strengths and
Weaknesses

Structure:
Chain of command

Culture:
Beliefs, expectations,
values

Resources:
Assets, skills,
competencies,
knowledge

Feedback/Learning: Make corrections as needed

Performance
Actual results

THIRTEENTH EDITION

Strategic
Management
and Business
Policy
TOWARD GLOBAL SUSTAINABILITY

This page intentionally left blank

THIRTEENTH EDITION

Strategic
Management
and Business
Policy
TOWARD GLOBAL SUSTAINABILITY
Thomas L. Wheelen

J. David Hunger

Formerly with University of Virginia
Trinity College, Dublin, Ireland

Iowa State University
St. John’s University

with major contributions by
Kathryn E. Wheelen
Alan N. Hoffman
Bentley University

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Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations
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Library of Congress Cataloging-in-Publication Data
Wheelen, Thomas L.
Strategic management and business policy : toward global
sustainability / Thomas L. Wheelen, J. David Hunger. — 13th ed.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-13-215322-5
ISBN-10: 0-13-215322-X
1. Strategic planning. 2. Strategic planning—Case studies.
3. Sustainability. I. Hunger, J. David, II. Title.
HD30.28.W43 2012
658.4’012—dc22
2011013549

10 9 8 7 6 5 4 3 2 1
ISBN 10:
0-13-215322-X
ISBN 13: 978-0-13-215322-5

Dedicated to
KATHY, RICHARD, AND TOM

BETTY, KARI AND JEFF, MADDIE AND
MEGAN, SUZI AND NICK, SUMMER AND
KACEY, LORI, MERRY AND DYLAN,
AND WOOFIE (ARF!).

SPECIAL DEDICATION TO KATHRYN WHEELEN:
Kathryn has worked on every phase of the case section of this book. Until this edition, she also managed
the construction of the Case Instructor’s Manual. She has done every job with a high level of dedication
and concern for both the case authors and the readers of this book.

This book is also dedicated to the following Prentice Hall/Pearson sales
representatives who work so hard to promote this book:
NOLA AKALA

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ALICIA BARNES

CHRIS DELANEY

CHRISTINE HENRY

ASHLEY BARNES

GEORGE DEVENNEY

LYNN HICKS

ALICE BARR

DANA DODGE (Frick)

JULIE HILDEBRAND

SHERRY BARTEL

KATE DOLDER

DAUNNE HINGLE

KENDRA BASSI

BARBARA DONLON

WENDI HOLLAND

JAY BECKENSTEIN

HEIDI DRESSLER

CHRISTY HUMENIUK

JOSH BECKENSTEIN

TRACY DYBALSKI

GENE HUMENIUK

NICOLE BELL

BRIAN DYK

ANDREA IORIO

CATHY BENNETT

KIM ECK

SUSAN JACKSON

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PAM JEFFRIES

SCOTT BORDEN

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JENNIFER BOYLE

KELSEY ELLIOTT

ANJALI JUSTUS

AUNDREA BRIDGES

KATIE EYNON

CHERYL KABB

SUZANNE BROWN

GENEVA FARROW

LAURA KAPPES

ALEXANDRA BUEHLER

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GIA KAUL

KYLE BURDETTE

MIKE FINER

JULIE KESTENBAUM

WHITNEY CAMERON

MICHELLE FINNERTY

KARTAPURKH KHALSA

RUTH CARDIFF

CANDAS FLETCHER

KIM KIEHLER

AMY CAREY

ROBERT FLORY

AMANDA KILLEEN

MEGAN CARRICO

MARCIA FLYNN

WALT KIRBY

MARTI CARTER

BRAD FORRESTER

MARY-JO KOVACH

ANDREA CATULLO-LINN

MARGARET FRENCH

ROBYN KOVAR

MEREDITH CHANDLER

STEPHANIE FRITSON

GREG KRAMP

LUKE CLAEYS

MARK GAFFNEY

DANIEL KRAUSS

KAYLEE CLAYMORE

MICHELLE GARCIA-JUCHTER

MICHAEL KRISANDA

BRIAN COBB

SYBIL GERAUD

GINA LaMANTIA

JENNIFER COLE

AMBER GOECKE

CHAFIKA LANDERS

TARYLL CONNOLLY

CAROLYN GOGOLIN

DOROTHY LANDRY

THAYNE CONRAD

ADAM GOLDSTEIN

DUSTIN LANGE

DONNA CONROY

BETH GRUNFELD

ALIX LaSCOLA

CAITLIN COUTHEN

MICAELA HAIDLE

JOE LEE

MEGAN JOY COWART

GREG HAITH

APRIL LEMONS

CYNDI CRIMMINS

DEMETRIUS HALL

KIMBERLY LENAGHAN

DEDICATION
TRICIA LISCIO

COLLEEN O’DELL

MARY SHAPIRO

BETH LUDWIG

DEBBIE OGILIVE

BARBARA SHERRY

CARY LUNA

SARI ORLANSKY

KEN SHIPBAUGH

JEMINA MACHARRY

DAVE OSTROW

DAVE SHULER

KATIE MAHAN

DARCEY PALMER

JESSICA SIEMINSKI

LAURA MANN

KRISTINA PARKER

LEA SILVERMAN

PATRICIA MARTINEZ

TONI PAYNE

AUTUMN SLAUGHTER

CHRISTINA MASTROGIOVANNI

JULIANNE PETERSON

KRISTA SLAVICEK

SONNY MATHARU

MELISSA PFISTNER

SCOTT SMITH

TONY MATHIAS

CANDACE PINATARO

ADRIENNE SNOW

BROOK MATTHEWS

BELEN POLTORAK

LEE SOLOMONIDES

GEORGIA MAY

ELIZABETH POPIELARZ

BEN STEPHEN

ALICIA MCAULIFFE

MEGAN PRENDERGAST

DAN SULLIVAN

MASON McCARTNEY

NICOLE PRICE

JOHN SULLIVAN

KAREN McFADYEN

JILL PROMESSO

LORI SULLIVAN

BRIAN McGARRY

LENNY ANN RAPER

STEPHANIE SURFUS

MICHELLE McGOVERN

JOSH RASMUSSEN

AMANDA SVEC

IRENE McGUINNESS

AMANDA RAY

CHRISTINA TATE

RYAN McHENRY

SONYA REED

SARAH THOMAS

CRISTIN McMICHAEL

RICHARD RESCH

ABBY THORNBLADH

KEVIN MEASELLE

MARY RHODES

KATY TOWNLEY

RAY MEDINA

BRAD RITTER

ELIZABETH TREPKOWSKI

KELLY MEIERHOFER

DAN ROBERTSON

TARA TRIPP

MOLLY MEINERS

MATT ROBINSON

CAROLYN TWIST

MATT MESAROS

JENNIFER ROSEN

JOE VIRZI

SHALON MILLER

DOROTHY ROSENE

AMANDA VOLZ

JAMI MINARD

KELLEEN ROWE

BRITNEY WALKER

WILLIAM MINERICH

RICH ROWE

MADELEINE WATSON

EMILY MITCHELL

PEYTON ROYTEK

BEN WEBER

JILINE MIX

SENG SAECHAO

DANIEL WELLS

JULIE MOREL

STEVE SARTORI

MARK WHEELER

RAFAEL MORENO

LYNDA SAX

LIZ WILDES

TRACY MORSE

BOB SCANLON

MICHELLE WILES

OLIVIA MOUG

MARCUS SCHERER

BRIAN WILLIAMS

DOLLY MUNIZ

KIMBERLY SCHEYVING

ERIN WILLIAMS

TRICIA MURPHY

HEIDI SCHICK (Miller)

CINDY WILLIAMSON

LAUREN MURROW

BRAD SCHICK

RACHEL WILLIS

AMBER MYLLION (Parks)

CHRIS SCHMIDT

SIMON WONG

LINDA NELSON

DEBORAH SCHMIDT

KIMBERLY WOODS

LYNNE NICLAIR

MOLLY SCHMIDT

JACKIE WRIGHT

BOB NISBET

CORRINA SCHULTZ

HEATHER WRUBLESKY

BETSY NIXON

WHITNEY SEAGO

GEORGE YOUNG

TOM NIXON

CHRISTIANA SERLE

MARY ZIMMERMANN

LAURA NOAH

MARTHA SERNAS

KACIE ZIN

vii

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Brief Contents
PART ONE Introduction to Strategic Management and Business Policy 1

1 Basic Concepts of Strategic Management 2
2 Corporate Governance 42
3 Social Responsibility and Ethics in Strategic Management 70

CHAPTER
CHAPTER
CHAPTER

PART TWO Scanning the Environment 93

4 Environmental Scanning and Industry Analysis 94
5 Internal Scanning: Organizational Analysis 136

CHAPTER
CHAPTER

PART THREE Strategy Formulation 173

6 Strategy Formulation: Situation Analysis and Business Strategy 174
7 Strategy Formulation: Corporate Strategy 204
8 Strategy Formulation: Functional Strategy and Strategic Choice 236

CHAPTER
CHAPTER
CHAPTER

PART FOUR Strategy Implementation and Control 269
CHAPTER
CHAPTER
CHAPTER

9 Strategy Implementation: Organizing for Action 270
1 0 Strategy Implementation: Staffing and Directing 300
1 1 Evaluation and Control 328

PART FIVE Introduction to Case Analysis 363
CHAPTER

1 2 Suggestions for Case Analysis 364

PART SIX WEB CHAPTERS Other Strategic Issues
WEB CHAPTER
WEB CHAPTER
WEB CHAPTER

A Strategic Issues in Managing Technology & Innovation
B Strategic Issues in Entrepreneurial Ventures & Small Businesses
C Strategic Issues in Not-For-Profit Organizations

PART SEVEN Cases in Strategic Management 1-1
GLOSSARY

G-1

NAME INDEX I-1
SUBJECT INDEX

I-7
ix

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Contents
Preface xxix

PART ONE
CHAPTER

Introduction to Strategic Management and Business Policy
Basic Concepts of Strategic Management

1.1 The Study of Strategic Management

Phases of Strategic Management
Benefits of Strategic Management

5
6

1.2 Globalization and Environmental Sustainability: Challenges to Strategic Management 7
Impact of Globalization

Impact of Environmental Sustainability

Global Issue: REGIONAL TRADE ASSOCIATIONS REPLACE NATIONAL TRADE BARRIERS 9
Environmental Sustainability Issue: PROJECTED EFFECTS OF CLIMATE CHANGE 12

1.3 Theories of Organizational Adaptation
1.4 Creating a Learning Organization

1.5 Basic Model of Strategic Management
Environmental Scanning
Strategy Formulation

12
14

Strategy Highlight 1.1: DO YOU HAVE A GOOD MISSION STATEMENT? 18

Strategy Implementation

Evaluation and Control

Feedback/Learning Process

1.6 Initiation of Strategy: Triggering Events

Strategy Highlight 1.2: TRIGGERING EVENT AT UNILEVER 24

1.7 Strategic Decision Making

What Makes a Decision Strategic

Mintzberg’s Modes of Strategic Decision Making

Strategic Decision-Making Process: Aid to Better Decisions
1.8 The Strategic Audit: Aid to Strategic Decision-Making
1.9 End of Chapter Summary

APPENDIX 1.A Strategic Audit of a Corporation

xii

CONTENTS

CHAPTER

Corporate Governance

2.1 Role of the Board of Directors

Responsibilities of the Board

Members of a Board of Directors

Strategy Highlight 2.1: AGENCY THEORY VERSUS STEWARDSHIP THEORY
IN CORPORATE GOVERNANCE

Nomination and Election of Board Members
Organization of the Board

Impact of the Sarbanes-Oxley Act on U.S. Corporate Governance

Global Issue: CORPORATE GOVERNANCE IMPROVEMENTS THROUGHOUT THE WORLD 56

Trends in Corporate Governance
2.2 The Role of Top Management

Responsibilities of Top Management

Environmental Sustainability Issue: CONFLICT AT THE BODY SHOP 59

2.3 End of Chapter Summary
CHAPTER

Social Responsibility and Ethics in Strategic Management

3.1 Social Responsibilities of Strategic Decision Makers

Responsibilities of a Business Firm

Sustainability: More than Environmental?
Corporate Stakeholders

Environmental Sustainability Issue: THE DOW JONES SUSTAINABILITY INDEX 76
Strategy Highlight 3.1: JOHNSON & JOHNSON CREDO 78

3.2 Ethical Decision Making

Some Reasons for Unethical Behavior

Strategy Highlight 3.2: UNETHICAL PRACTICES AT ENRON AND WORLDCOM EXPOSED
BY “WHISTLE-BLOWERS”

Global Issue: HOW RULE-BASED AND RELATIONSHIP-BASED GOVERNANCE SYSTEMS
AFFECT ETHICAL BEHAVIOR

Encouraging Ethical Behavior
3.3 End of Chapter Summary

Ending Case for Part One: BLOOD BANANAS 90

PART TWO
CHAPTER

Scanning the Environment

Environmental Scanning and Industry Analysis
4.1 Environmental Scanning

Identifying External Environmental Variables

Environmental Sustainability Issue: MEASURING AND SHRINKING YOUR PERSONAL
CARBON FOOTPRINT

100

CONTENTS
Global Issue: IDENTIFYING POTENTIAL MARKETS IN DEVELOPING NATIONS 107

Identifying External Strategic Factors

108

4.2 Industry Analysis: Analyzing the Task Environment
Porter’s Approach to Industry Analysis
Industry Evolution

110

114

Categorizing International Industries
International Risk Assessment
Strategic Groups

115

Strategic Types

117

Hypercompetition

109

114

115

117

Using Key Success Factors to Create an Industry Matrix

118

Strategy Highlight 4.1: MICROSOFT IN A HYPERCOMPETITIVE INDUSTRY 118

4.3 Competitive Intelligence

120

Sources of Competitive Intelligence

121

Strategy Highlight 4.2: EVALUATING COMPETITIVE INTELLIGENCE 122

Monitoring Competitors for Strategic Planning
4.4 Forecasting

122

123

Danger of Assumptions

123

Useful Forecasting Techniques

124

4.5 The Strategic Audit: A Checklist for Environmental Scanning
4.6 Synthesis of External Factors—EFAS
4.7 End of Chapter Summary

126

127

APPENDIX 4.A Competitive Analysis Techniques

CHAPTER

133

Internal Scanning: Organizational Analysis

136

5.1 A Resource-Based Approach to Organizational Analysis
Core and Distinctive Competencies

138

Using Resources to Gain Competitive Advantage

139

Determining the Sustainability of an Advantage

140

5.2 Business Models

125

142

5.3 Value-Chain Analysis

143

Strategy Highlight 5.1: A NEW BUSINESS MODEL AT SMARTYPIG 144

Industry Value-Chain Analysis

145

Corporate Value-Chain Analysis

146

5.4 Scanning Functional Resources and Capabilities
Basic Organizational Structures

147

Corporate Culture: The Company Way

149

147

xiii

xiv

CONTENTS
Global Issue: MANAGING CORPORATE CULTURE FOR GLOBAL COMPETITIVE
ADVANTAGE: ABB VERSUS MATSUSHITA 150

Strategic Marketing Issues

151

Strategic Financial Issues

153

Strategic Research and Development (R&D) Issues
Strategic Operations Issues

154

156

Strategic Human Resource (HRM) Issues

158

Environmental Sustainability Issue: USING ENERGY EFFICIENCY FOR COMPETITIVE
ADVANTAGE AND QUALITY OF WORK LIFE 161

Strategic Information Systems/Technology Issues

162

5.5 The Strategic Audit: A Checklist for Organizational
Analysis 163
5.6 Synthesis of Internal Factors
5.7 End of Chapter Summary

164

165

Ending Case for Part Two: BOEING BETS THE COMPANY 170

PART THREE
CHAPTER

Strategy Formulation

173

Strategy Formulation: Situation Analysis and Business Strategy
6.1 Situation Analysis: SWOT Analysis

174

176

Generating a Strategic Factors Analysis Summary (SFAS)
Matrix 176
Finding a Propitious Niche

177

Global Issue: SAB DEFENDS ITS PROPITIOUS NICHE 181

6.2 Review of Mission and Objectives

181

6.3 Generating Alternative Strategies by Using a TOWS Matrix
6.4 Business Strategies

182

183

Porter’s Competitive Strategies

183

Environmental Sustainability Issue: PATAGONIA USES SUSTAINABILITY
AS DIFFERENTIATION COMPETITIVE STRATEGY 187

Cooperative Strategies

195

6.5 End of Chapter Summary

CHAPTER

199

Strategy Formulation: Corporate Strategy
7.1 Corporate Strategy

206

7.2 Directional Strategy

206

Growth Strategies

204

207

Strategy Highlight 7.1: TRANSACTION COST ECONOMICS ANALYZES VERTICAL
GROWTH STRATEGY

210

CONTENTS
Global Issue: COMPANIES LOOK TO INTERNATIONAL MARKETS
FOR HORIZONTAL GROWTH

212

Strategy Highlight 7.2: SCREENING CRITERIA FOR CONCENTRIC
DIVERSIFICATION 215

Controversies in Directional Growth Strategies

216

Stability Strategies 217
Retrenchment Strategies
7.3 Portfolio Analysis

218

220

BCG Growth-Share Matrix

221

Environmental Sustainability Issue: GENERAL MOTORS
AND THE ELECTRIC CAR

GE Business Screen

222

223

Advantages and Limitations of Portfolio Analysis
Managing a Strategic Alliance Portfolio
7.4 Corporate Parenting

225

226

Developing a Corporate Parenting Strategy

227

Horizontal Strategy and Multipoint Competition
7.5 End of Chapter Summary

CHAPTER

225

228

229

Strategy Formulation: Functional Strategy and Strategic Choice
8.1 Functional Strategy

238

Marketing Strategy

238

Financial Strategy

239

Research and Development (R&D) Strategy
Operations Strategy

236

241

242

Global Issue: INTERNATIONAL DIFFERENCES ALTER WHIRLPOOL’S
OPERATIONS STRATEGY

Purchasing Strategy

243

244

Environmental Sustainability Issue: OPERATIONS NEED FRESH WATER
AND LOTS OF IT!

245

Logistics Strategy

246

Human Resource Management (HRM) Strategy
Information Technology Strategy

247

8.2 The Sourcing Decision: Location of Functions
8.3 Strategies to Avoid

246
247

250

8.4 Strategic Choice: Selecting the Best Strategy
Constructing Corporate Scenarios
Process of Strategic Choice

257

251

xvi

CONTENTS

8.5 Developing Policies

258

8.6 End of Chapter Summary 259
Ending Case for Part Three: KMART AND SEARS: STILL STUCK IN THE MIDDLE? 266

PART FOUR

Strategy Implementation and Control 269

Strategy Implementation: Organizing for Action

CHAPTER

270

9.1 Strategy Implementation 272
9.2 Who Implements Strategy?
9.3 What Must Be Done?

273

Developing Programs, Budgets, and Procedures

274

Environmental Sustainability Issue: FORD’S SOYBEAN SEAT FOAM PROGRAM 274
Strategy Highlight 9.1: THE TOP TEN EXCUSES FOR BAD SERVICE 277

Achieving Synergy

278

9.4 How Is Strategy to Be Implemented? Organizing for Action
Structure Follows Strategy

279

Stages of Corporate Development
Organizational Life Cycle

280

283

Advanced Types of Organizational Structures

285

Reengineering and Strategy Implementation

288

Six Sigma

278

289

Designing Jobs to Implement Strategy

290

Strategy Highlight 9.2: DESIGNING JOBS WITH THE JOB CHARACTERISTICS MODEL 291

9.5 International Issues in Strategy Implementation
International Strategic Alliances

291

292

Stages of International Development

293

Global Issue: MULTIPLE HEADQUARTERS: A SIXTH STAGE
OF INTERNATIONAL DEVELOPMENT?

294

Centralization Versus Decentralization

294

9.6 End of Chapter Summary 296
CHAPTER

1 0 Strategy Implementation: Staffing and Directing
10.1 Staffing

300

302

Staffing Follows Strategy

303

Selection and Management Development

305

Strategy Highlight 10.1: HOW HEWLETT-PACKARD IDENTIFIES POTENTIAL EXECUTIVES 306

Problems in Retrenchment

308

International Issues in Staffing

309

CONTENTS

10.2 Leading

311

Managing Corporate Culture

311

Environmental Sustainability Issue: ABBOTT LABORATORIES’ NEW PROCEDURES
FOR GREENER COMPANY CARS

312

Action Planning 316
Management by Objectives

318

Total Quality Management

318

International Considerations in Leading

319

Global Issue: CULTURAL DIFFERENCES CREATE IMPLEMENTATION
PROBLEMS IN MERGER

321

10.3 End of Chapter Summary

CHAPTER

1 1 Evaluation and Control

322

328

11.1 Evaluation and Control in Strategic Management
11.2 Measuring Performance
Appropriate Measures
Types of Controls

330

332
332

332

Activity-Based Costing

334

Enterprise Risk Management

335

Primary Measures of Corporate Performance

335

Environmental Sustainability Issue: HOW GLOBAL WARMING COULD
AFFECT CORPORATE VALUATION

340

Primary Measures of Divisional and Functional Performance
International Measurement Issues

342

344

Global Issue: COUNTERFEIT GOODS AND PIRATED SOFTWARE:
A GLOBAL PROBLEM 346

11.3 Strategic Information Systems

347

Enterprise Resource Planning (ERP)

347

Radio Frequency Identification (RFID)

348

Divisional and Functional IS Support

348

11.4 Problems in Measuring Performance

348

Short-Term Orientation
Goal Displacement

349

350

11.5 Guidelines for Proper Control

351

Strategy Highlight 11.1: SOME RULES OF THUMB IN STRATEGY 351

11.6 Strategic Incentive Management
11.7 End of Chapter Summary

352

354

Ending Case for Part Four: HEWLETT-PACKARD BUYS EDS 360

xvii

xviii

CONTENTS

PART FIVE
CHAPTER

Introduction to Case Analysis

363

1 2 Suggestions for Case Analysis

364

12.1 The Case Method

365

12.2 Researching the Case Situation

366

12.3 Financial Analysis: A Place to Begin
Analyzing Financial Statements

366

369

Environmental Sustainability Issue: IMPACT OF CARBON TRADING 370
Global Issue: FINANCIAL STATEMENTS OF MULTINATIONAL CORPORATIONS:
NOT ALWAYS WHAT THEY SEEM

371

Common-Size Statements 371
Z-value and Index of Sustainable Growth
Useful Economic Measures

371

372

12.4 Format for Case Analysis: The Strategic Audit
12.5 End of Chapter Summary

373

375

APPENDIX 12.A Resources for Case Research

377

APPENDIX 12.B Suggested Case Analysis Methodology Using the Strategic Audit
APPENDIX 12.C Example of a Student-Written Strategic Audit

380

383

Ending Case for Part Five: IN THE GARDEN 391
GLOSSARY

G-1

NAME INDEX

I-1

SUBJECT INDEX

I-1

PART SIX WEB CHAPTERS
WEB CHAPTER

Other Strategic Issues

Strategic Issues in Managing Technology and Innovation
1 The Role of Management
Strategy Highlight 1: EXAMPLES OF INNOVATION EMPHASIS IN MISSION
STATEMENTS

2 Environmental Scanning
External Scanning
Internal Scanning
3 Strategy Formulation
Product vs. Process R&D
Technology Sourcing
Global Issue: USE OF INTELLECTUAL PROPERTY AT HUAWEI TECHNOLOGIES

Importance of Technological Competence
Categories of Innovation
Product Portfolio

CONTENTS

4 Strategy Implementation
Developing an Innovative Entrepreneurial Culture
Organizing for Innovation: Corporate Entrepreneurship
Strategy Highlight 2: HOW NOT TO DEVELOP AN INNOVATIVE ORGANIZATION

5 Evaluation and Control
Evaluation and Control Techniques
Evaluation and Control Measures
6 End of Chapter Summary
WEB CHAPTER

Strategic Issues in Entrepreneurial Ventures and Small Businesses
1 Importance of Small Business and Entrepreneurial Ventures
Global Issue: ENTREPRENEURSHIP: SOME COUNTRIES ARE MORE
SUPPORTIVE THAN OTHERS

Definition of Small-Business Firms and Entrepreneurial
Ventures
The Entrepreneur as Strategist
2 Use of Strategic Planning and Strategic Management
Degree of Formality
Usefulness of the Strategic Management Model
Usefulness of the Strategic Decision-Making Process
3 Issues in Corporate Governance
Boards of Directors and Advisory Boards
Impact of the Sarbanes-Oxley Act
4 Issues in Environmental Scanning and Strategy Formulation
Sources of Innovation
Factors Affecting a New Venture’s Success
Strategy Highlight 1: SUGGESTIONS FOR LOCATING AN OPPORTUNITY
AND FORMULATING A BUSINESS STRATEGY

5 Issues in Strategy Implementation
Substages of Small Business Development
Transfer of Power and Wealth in Family Businesses
6 Issues in Evaluation and Control
7 End of Chapter Summary
WEB CHAPTER

Strategic Issues in Not-for-Profit Organizations
1 Why Not-for-Profit?
Global Issue: WHICH IS BEST FOR SOCIETY: BUSINESS
OR NOT-FOR-PROFIT?

xix

CONTENTS

2 Importance of Revenue Source
Sources of Not-for-Profit Revenue
Patterns of Influence on Strategic Decision Making
Usefulness of Strategic Management Concepts and Techniques
3 Impact of Constraints on Strategic Management
Impact on Strategy Formulation
Impact on Strategy Implementation
Impact on Evaluation and Control
4 Not-for-Profit Strategies
Strategic Piggybacking
Strategy Highlight 1: RESOURCES NEEDED FOR SUCCESSFUL STRATEGIC
PIGGYBACKING

Mergers
Strategic Alliances
5 End of Chapter Summary

PART SEVEN
SECTION A
CASE 1

Cases in Strategic Management 1-1
Corporate Governance and Social Responsibility: Executive Leadership
The Recalcitrant Director at Byte Products Inc.: Corporate Legality versus
Corporate Responsibility 1-7
(Contributors: Dan R. Dalton, Richard A. Cosier, and Cathy A. Enz)
A plant location decision forces a confrontation between the board of directors and the CEO regarding
an issue in social responsibility and ethics.

CASE 2

The Wallace Group 2-1
(Contributor: Laurence J. Stybel)
Managers question the company’s strategic direction and how it is being managed by its founder
and CEO. Company growth has resulted not only in disorganization and confusion among
employees, but in poor overall performance. How should the board deal with the company’s
founder?

SECTION B
CASE 3

Business Ethics
Everyone Does It 3-1
(Contributors: Steven M. Cox and Shawana P. Johnson)
When Jim Willis, Marketing VP, learns that the launch date for the company’s new satellite will
be late by at least a year, he is told by the company’s president to continue using the earlier
published date for the launch. When Jim protests that the use of an incorrect date to market
contracts is unethical, he is told that spacecraft are never launched on time and that it is common
industry practice to list unrealistic launch dates. If a realistic date was used, no one would contract
with the company.

CONTENTS

CASE 4

xxi

The Audit 4-1
(Contributors: John A. Kilpatrick, Gamewell D. Gantt, and George A. Johnson)
A questionable accounting practice by the company being audited puts a new CPA in a difficult
position. Although the practice is clearly wrong, she is being pressured by her manager to ignore it
because it is common in the industry.

SECTION C
CASE 5

International Issues in Strategic Management
Starbucks’ Coffee Company: The Indian Dilemma 5-1
(Contributors: Ruchi Mankad and Joel Sarosh Thadamalla)
Starbucks is the world’s largest coffee retailer with over 11,000 stores in 36 countries and over
10,000 employees. The case focuses on India as a potential market for the coffee retailer, presenting
information on India’s societal environment and beverage industry. Profiles are provided for various
existing coffee shop chains in India. The key issue in the case revolves around the question: Are
circumstances right for Starbucks to enter India?

CASE 6

Guajilote Cooperativo Forestal: Honduras 6-1
(Contributors: Nathan Nebbe and J. David Hunger)

exclusive

SECTION D

This forestry cooperative has the right to harvest, transport, and sell fallen mahogany trees in
La Muralla National Park of Honduras. Although the cooperative has been successful thus far, it is
facing some serious issues: low prices for its product, illegal logging, deforestation by poor farmers,
and possible world trade restrictions on the sale of mahogany.

General Issues in Strategic Management

INDUSTRY ONE:
Information Technology
CASE 7 Apple Inc.: Performance in a Zero-Sum World Economy 7-1
(Contributors: Kathryn E. Wheelen, Thomas L. Wheelen II, Richard D. Wheelen, Moustafa H.
Abdelsamad, Bernard A. Morin, Lawrence C. Pettit, David B. Croll, and Thomas L. Wheelen)
new
exclusive

Apple, the first company to mass-market a personal computer, had become a minor player in an
industry dominated by Microsoft. After being expelled from the company in 1985, founder Steve Jobs
returned as CEO in 1997 to reenergize the firm. The introduction of the iPod in 2001, followed by the
iPad, catapulted Apple back into the spotlight. However, in 2011 Jobs was forced to take his third
medical leave, leading to questions regarding his ability to lead Apple. How can Apple continue its
success? How dependent is the company on Steve Jobs?

CASE 8

iRobot: Finding the Right Market Mix? 8-1
(Contributor: Alan N. Hoffman)

new
exclusive

Founded in 1990, iRobot was among the first companies to introduce robotic technology into the
consumer market. Employing over 500 robotic professionals, the firm planned to lead the robotics
industry. Unfortunately, its largest revenue source, home care robots, are a luxury good and vulnerable
to recessions. Many of iRobot’s patents are due to expire by 2019. The firm is highly dependent upon
suppliers to make its consumer products and the U.S. government for military sales. What is the best
strategy for its future success?

CASE 9

Dell Inc.: Changing the Business Model (Mini Case) 9-1
(Contributor: J. David Hunger)

new
exclusive

Dell, once the largest PC vendor in the world, is now battling with Acer for second place in the global PC
market. Its chief advantages—direct marketing and power over suppliers—no longer provided a
competitive advantage. The industry’s focus has shifted from desktop PCs to mobile computing, software,
and technology services, areas of relative weakness for Dell. Is it time for Dell to change its strategy?

xxii

CONTENTS

CASE 10

Rosetta Stone Inc.: Changing the Way People Learn Languages 10-1
(Contributors: Christine B. Buenafe and Joyce P. Vincelette)

new
exclusive

Rosetta Stone’s mission was to change the way people learn languages. The company blended
language learning with technology at a time when globalization connected more and more individuals
and institutions to each other. How should the company move forward? Would it be appropriate for
Rosetta Stone to offer products like audio books or services in order to increase market share? Which
international markets could provide the company with a successful future?

CASE 11

Logitech (Mini Case) 11-1
(Contributor: Alan N. Hoffman)

new
exclusive

Logitech, the world’s leading provider of computer peripherals, was on the forefront of mouse,
keyboard, and video conferencing technology. By 2010, however, Logitech’s products were threatened
by new technologies, such as touch pads, that could replace both the mouse and keyboard. As the
peripherals market begins to disintegrate, Logitech is considering a change in strategy.

INDUSTRY TWO:
CASE 12

INTERNET COMPANIES

Google Inc. (2010): The Future of the Internet Search Engine 12-1
(Contributor: Patricia A. Ryan)

new
exclusive

Google, an online company that provides a reliable Internet search engine, was founded in 1998 and soon
replaced Yahoo as the market leader in Internet search engines. By 2010, Google was one of the strongest
brands in the world. Nevertheless, its growth by acquisition strategy was showing signs of weakness. Its
2006 acquisition of YouTube had thus far not generated significant revenue growth. Groupon, a shopping
Web site, rebuffed Google’s acquisition attempt in 2010. Is it time for a strategic change?

CASE 13

Reorganizing Yahoo! 13-1
(Contributors: P. Indu and Vivek Gupta)
Yahoo! created the first successful Internet search engine, but by 2004 it was losing its identity. Was it
a search engine, a portal, or a media company? On December 5, 2006, Yahoo’s CEO announced a
reorganization of the company into three groups. It was hoped that a new mission statement and a new
structure would make Yahoo leaner and more responsive to customers. Would this be enough to turn
around the company?

INDUSTRY THREE:
CASE 14

ENTERTAINMENT AND LEISURE

TiVo Inc.: TiVo vs. Cable and Satellite DVR: Can TiVo survive? 14-1
(Contributors: Alan N. Hoffman, Randy Halim, Rangki Son, and Suzanne Wong)
TiVo was founded to create a device capable of recording digitized video on a computer hard drive for
television viewing. Even though revenues had jumped from $96 million in 2003 to $259 million in
2007, the company had never earned a profit. Despite many alliances, TiVo faced increasing
competition from generic DVRs offered by satellite and cable companies. How long can the company
continue to sell TiVo DVRs when the competition sells generic DVRs at a lower price or gives them
away for free?

CASE 15

Marvel Entertainment Inc. 15-1
(Contributors: Ellie A. Fogarty and Joyce P. Vincelette)

exclusive

Marvel Entertainment was known for its comic book characters Captain America, Spider Man,
the Fantastic Four, the Incredible Hulk, the Avengers, and the X-Men. With its 2008 self-produced
films, Iron Man and The Incredible Hulk, Marvel had expanded out of comic books to become a
leader in the entertainment industry. The company was no longer competing against other comic
book publishers like DC Comics, but was now competing against entertainment giants like Walt
Disney and NBC Universal. What should Marvel’s management do to ensure the company’s future
success?

CONTENTS

CASE 16

xxiii

Carnival Corporation and plc (2010) 16-1
(Contributors: Michael J. Keeffe, John K. Ross III, Sherry K. Ross, Bill J. Middlebrook,
and Thomas L. Wheelen)

new
exclusive

With its “fun ship,” Carnival Cruises changed the way people think of ocean cruises. The cruise
became more important than the destination. Through acquisition, Carnival expanded its product line
to encompass an entire range of industry offerings. How can Carnival continue to grow in the industry
it now dominates?

INDUSTRY FOUR:
CASE 17

TRANSPORTATION

Chrysler in Trouble 17-1
(Contributors: Barnali Chakraborty and Vivek Gupta)

new

CASE 18

On April 30, 2009, Chrysler Motors, the third-largest auto manufacturer in the United States, filed
for bankruptcy protection along with its 24 wholly owned U.S. subsidiaries. As a condition of the
U.S. federal government’s loan of more than $8 billion, Fiat was given 20% of the new Chrysler
Corporation with the option of increasing its stake to 51% by 2016 after the new company had
repaid the federal government’s loan. What does Chrysler need to do to ensure the success of its
partnership with Fiat?

Tesla Motors Inc. (Mini Case) 18-1
(Contributor: J. David Hunger)

new
exclusive

Tesla Motors was founded in 2004 to produce electric automobiles. Its first car, the Tesla Roadster,
sold for $101,000. It could accelerate from zero to 60 mph in 3.9 seconds and cruise for 236 miles on a
single charge. In contrast to existing automakers, Tesla sold and serviced its cars through the Internet
and its own Tesla stores. With the goal of building a full line of electric vehicles, Tesla Motors faced
increasing competition from established automakers. How could Tesla Motors succeed in an industry
dominated by giant global competitors?

CASE 19

Harley-Davidson Inc. 2008: Thriving through a Recession 19-1
(Contributors: Patricia A. Ryan and Thomas Wheelen)

exclusive

CASE 20

Harley-Davidson 2008: Thriving Through Recession is a modern success story of a motorcycle
company that turned itself around by emphasizing quality manufacturing and image marketing. After
consistently growing through the 1990s, sales were showing signs of slowing as the baby boomers
continued to age. Safety was also becoming an issue. For the first time in recent history, sales and
profits declined in 2007 from 2006. Analysts wondered how the company would be affected in a
recession. How does Harley-Davidson continue to grow at its past rate?

JetBlue Airways: Growing Pains? 20-1
(Contributors: Shirisha Regani and S. S. George)
JetBlue Airways had been founded as a “value player” in the niche between full service airlines and
low-cost carriers. Competition had recently intensified and several airlines were taking advantage of
bankruptcy protection to recapture market share through price cuts. JetBlue’s operating costs were
rising as a result of increasing fuel costs, aircraft maintenance expenses, and service costs. Has
JetBlue been growing too fast and was growth no longer sustainable?

CASE 21

TomTom: New Competition Everywhere! 21-1
(Contributor: Alan N. Hoffman)

new
exclusive

TomTom, an Amsterdam-based company that provided navigation services and devices, led the
navigation systems market in Europe and was second in popularity in the United States. However, the
company was facing increasing competition from other platforms using GPS technology like cell
phones and Smartphones with a built-in navigation function. As its primary markets in the United
States and Europe mature, how can the company ensure its future growth and success?

xxiv

CONTENTS

INDUSTRY FIVE:
CASE 22

CLOTHING

Volcom Inc.: Riding the Wave 22-1
(Contributors: Christine B. Buenafe and Joyce P. Vincelette)

new
exclusive

Volcom was formed south of Los Angeles in 1991 as a clothing company rooted in the action sports of
skateboarding, surfing, and snowboarding. By 2008, Volcom-branded products were sold throughout
the United States and in over 40 countries. It did not own any manufacturing facilities, but instead
worked with foreign contract manufacturers. As a primary competitor in the boardsports community,
Volcom was committed to maintaining its brand, position, and lifestyle and needed to reassess its
strategy.

CASE 23

TOMS Shoes (Mini Case) 23-1
(Contributor: J. David Hunger)

new
exclusive

INDUSTRY SIX:
CASE 24

Founded in 2006 by Blake Mycoskie, TOMS Shoes is an American footwear company based in Santa
Monica, California. Although TOMS Shoes is a for-profit business, its mission is more like that of a
not-for-profit organization. The firm’s reason for existence is to donate to children in need one new
pair of shoes for every pair of shoes sold. By 2010, the company had sold over one million pairs of
shoes. How should the company plan its future growth?

SPECIALTY RETAILING

Best Buy Co. Inc.: Sustainable Customer Centricity Model? 24-1
(Contributor: Alan N. Hoffman)

new
exclusive

Best Buy, the largest consumer electronics retailer in the United States, operates 4,000 stores in North
America, China, and Turkey. Best Buy distinguishes itself from competitors by deploying a
differentiation strategy based on superior service rather than low price. The recent recession has
stressed its finances and the quality of its customer service. How can Best Buy continue to have
innovative products, top-notch employees, and superior customer service while facing increased
competition, operational costs, and financial stress?

CASE 25

The Future of Gap Inc. 25-1
(Contributor: Mridu Verma)
Gap Inc. offered clothing, accessories, and personal care products under the Gap, Banana Republic,
and Old Navy brands. After a new CEO introduced a turnaround strategy, sales increased briefly, then
fell. Tired of declining sales, the board of directors hired Goldman Sachs to explore strategies to
improve, ranging from the sale of its stores to spinning off a single division.

CASE 26

Rocky Mountain Chocolate Factory Inc. (2008) 26-1
(Contributors: Annie Phan and Joyce P. Vincelette)

exclusive

CASE 27

Rocky Mountain Chocolate Factory had five company-owned and 329 franchised stores in 38 states,
Canada, and the United Arab Emirates. Even though revenues and net income had increased from
2005 through 2008, they had been increasing at a decreasing rate. Candy purchased from the factory
by the stores had actually dropped 9% in 2008 from 2007. Was the bloom off the rose at Rocky
Mountain Chocolate?

Dollar General Corporation (Mini Case) 27-1
(Contributor: Kathryn E. Wheelen)

new
exclusive

With annual revenues of $12.7 billion and 9,200 stores in 35 states, Dollar General is the largest of the
discount “dollar stores” in the United States. Although far smaller than its “big brothers” Wal-Mart
and Target, Dollar General has done very well during the recent economic recession. In 2011, it plans
to open 625 new stores in three new states. Given that the company has substantial long-term debt, is
this the right time to expand the company’s operations?

CONTENTS

INDUSTRY SEVEN:
CASE 28

xxv

MANUFACTURING

Inner-City Paint Corporation (Revised) 28-1
(Contributors: Donald F. Kuratko and Norman J. Gierlasinski)
Inner-City Paint makes paint for sale to contractors in the Chicago area. However, the founder’s lack
of management knowledge is creating difficulties for the firm, and the company is in financial
difficulty. Unless something is done soon, it may go out of business.

CASE 29

The Carey Plant 29-1
(Contributors: Thomas L. Wheelen and J. David Hunger)

exclusive

The Carey Plant was a profitable manufacturer of quality machine parts until it was acquired by the
Gardner Company. Since its acquisition, the plant has been plagued by labor problems, increasing
costs, leveling sales, and decreasing profits. Gardner Company’s top management is attempting to
improve the plant’s performance and better integrate its activities with those of the corporation by
selecting a new person to manage the plant.

I N D U S T R Y E I G H T:
CASE 30

FOOD AND BEVERAGE

The Boston Beer Company: Brewers of Samuel Adams Boston Lager
(Mini Case) 30-1
(Contributor: Alan N. Hoffman)

new
exclusive

The Boston Beer Company was founded in 1984 by Jim Koch, viewed as the pioneer of the American
craft beer revolution. Brewing over 1 million barrels of 25 different styles of beer, Boston Beer is the
sixth-largest brewer in the United States. Even though overall domestic beer sales declined 1.2% in
2010, sales of craft beer have increased 20% since 2002, with Boston Beer’s increasing 22% from
2007 to 2009. How can the company continue its rapid growth in a mature industry?

CASE 31

Wal-Mart and Vlasic Pickles 31-1
(Contributor: Karen A. Berger)
A manager of Vlasic Foods International closed a deal with Wal-Mart that resulted in selling more
pickles than Vlasic had ever sold to any one account. The expected profit of one to two cents per jar
was not sustainable, however, due to unplanned expenses. Vlasic’s net income plummeted and the
company faced bankruptcy. Given that Wal-Mart was Vlasic’s largest customer, what action should
management take?

CASE 32

Panera Bread Company (2010): Still Rising Fortunes? 32-1
(Contributors: Joyce Vincelette and Ellie A. Fogarty)

new
exclusive

Panera Bread is a successful bakery-café known for its quality soups and sandwiches. Even though
Panera’s revenues and net earnings have been rising rapidly, new unit expansion throughout North
America has fueled this growth. Will revenue growth stop once expansion slows? The retirement of
CEO Ronald Shaich, the master baker who created the “starter” for the company’s phenomenal
growth, is an opportunity to rethink Panera’s growth strategy.

CASE 33

Whole Foods Market (2010): How to Grow in an Increasingly Competitive Market?
(Mini Case) 33-1
(Contributors: Patricia Harasta and Alan N. Hoffman)

new
exclusive

Whole Foods Market is the world’s leading retailer of natural and organic foods. The company
differentiates itself from competitors by focusing on innovation, quality, and service excellence,
allowing it to charge premium prices. Although the company dominates the natural/organic foods
category in North America, it is facing increasing competition from larger food retailers, such as WalMart, who are adding natural/organic foods to their offerings.

xxvi

CONTENTS

CASE 34

Burger King (Mini Case) 34-1
(Contributor: J. David Hunger)

new
exclusive

Founded in Florida in 1953, Burger King has always trailed behind McDonald’s as the second-largest
fast-food hamburger chain in the world. Although its total revenues dropped only slightly from 2009,
its 2010 profits dropped significantly, due to high expenses. Burger King’s purchase by an investment
group in 2010 was an opportunity to rethink the firm’s strategy.

CASE 35

Church & Dwight: Time to Rethink the Portfolio? 35-1
(Contributor: Roy A. Cook)

new

Church & Dwight, the maker of ARM & HAMMER Baking Soda, has used brand extension to
successfully market multiple consumer products based on sodium bicarbonate. Searching for a new
growth strategy, the firm turned to acquisitions. Can management successfully achieve a balancing act
based on finding growth through expanded uses of sodium bicarbonate while assimilating a divergent
group of consumer products into an expanding international footprint?

SECTION E

Web Mini Cases
Additional Mini Cases Available on the Companion Web Site at
www.pearsonhighered.com/wheelen.

WEB CASE 1

Eli Lily & Company
(Contributor: Maryanne M. Rouse)
A leading pharmaceutical company, Eli Lilly produces a wide variety of ethical drugs and animal
health products. Despite an array of new products, the company’s profits declined after the firm lost
patent protection for Prozac. In addition, the FDA found quality problems at several of the company’s
manufacturing sites, resulting in a delay of new product approvals. How should Lily position itself in
a very complex industry?

WEB CASE 2

Tech Data Corporation
(Contributor: Maryanne M. Rouse)
Tech Data, a distributor of information technology and logistics management, has rapidly
grown through acquisition to become the second-largest global IT distributor. Sales and profits
have been declining, however, since 2001. As computers become more like a commodity, the
increasing emphasis on direct distribution by manufacturers threaten wholesale distributors like
Tech Data.

WEB CASE 3

Stryker Corporation
(Contributor: Maryanne M. Rouse)
Stryker is a leading maker of specialty medical and surgical products, a market expected to show
strong sales growth. Stryker markets its products directly to hospitals and physicians in the United
States and 100 other countries. Given the decline in the number of hospitals due to consolidation
and cost containment efforts by government programs and health care insurers, the industry
expects continued downward pressure on prices. How can Stryker effectively deal with these
developments?

WEB CASE 4

Sykes Enterprises
(Contributor: Maryanne M. Rouse)
Sykes provides outsourced customer relationship management services worldwide in a highly
competitive, fragmented industry. Like its customers, Sykes has recently been closing its call
centers in America and moving to Asia in order to reduce costs. Small towns felt betrayed by the
firm’s decision to leave—especially after providing financial incentives to attract the firm.
Nevertheless, declining revenue and net income has caused the company’s stock to drop to an
all-time low.

CONTENTS
WEB CASE 5

xxvii

Pfizer Inc.
(Contributor: Maryanne M. Rouse)
With its acquisition in 2000 of rival pharmaceutical firm Warner-Lambert for its Lipitor prescription
drug, Pfizer has become the world’s largest ethical pharmaceutical company in terms of sales. Already
the leading company in the United States, Pfizer’s purchase of Pharmacia in 2002 moved Pfizer from
fourth to first place in Europe. Will large size hurt or help the company’s future growth and
profitability in an industry facing increasing scrutiny?

WEB CASE 6

Williams-Sonoma
(Contributor: Maryanne M. Rouse)
Williams-Sonoma is a specialty retailer of home products. Following a related diversification
growth strategy, the company operates 415 Williams-Sonoma, Pottery Barn, and Hold Everything
retail stores throughout North America. Its direct sales segment includes six retail catalogues and
three e-commerce sites. The company must deal with increasing competition in this fragmented
industry characterized by low entry barriers.

WEB CASE 7

Tyson Foods Inc.
(Contributor: Maryanne M. Rouse)
Tyson produces and distributes beef, chicken, and pork products in the United States. It acquired IBP, a
major competitor, but has been the subject of lawsuits by its employees and the EPA. How should
management deal with its poor public relations and position the company to gain and sustain competitive
advantage in an industry characterized by increasing consolidation and intense competition?

WEB CASE 8

Southwest Airlines Company
(Contributor: Maryanne M. Rouse)
The fourth-largest U.S. airline in terms of passengers carried and second-largest in scheduled domestic
departures, Southwest was the only domestic airline to remain profitable in 2001. Emphasizing highfrequency, short-haul, point-to-point, and low-fare service, the airline has the lowest cost per available
seat mile flown of any U.S. major passenger carrier. Can Southwest continue to be successful as
competitors increasingly imitate its competitive strategy?

WEB CASE 9

Outback Steakhouse Inc.
(Contributor: Maryanne M. Rouse)
With 1,185 restaurants in 50 states and 21 foreign countries, Outback (OSI) is one of the largest casual
dining restaurant companies in the world. In addition to Outback Steakhouse, the company is
composed of Carrabba’s Italian Grill, Fleming’s Prime Steakhouse & Wine Bar, Bonefish Grill, Roy’s,
Lee Roy Selmon’s, Cheeseburger in Paradise, and Paul Lee’s Kitchen. Analysts wonder how long OSI
can continue to grow by adding new types of restaurants to its portfolio.

W E B C A S E 10

Intel Corporation
(Contributor: J. David Hunger)
Although more than 80% of the world’s personal computers and servers use its microprocessors, Intel
is facing strong competition from AMD in a maturing market. Sales growth is slowing. Profits are
expected to rise only 5% in 2006 compared to 40% annual growth previously. The new CEO decides to
reinvent Intel to avoid a fate of eventual decline.

W E B C A S E 11

AirTran Holdings Inc.
(Contributor: Maryanne M. Rouse)
AirTran (known as ValuJet before a disastrous crash in the Everglades) is the second-largest lowfare scheduled airline (after Southwest) in the United States in terms of departures and, along with
Southwest, the only U.S. airline to post a profit in 2004. The company’s labor costs as a percentage
of sales are the lowest in the industry. Will AirTran continue to be successful in this highly
competitive industry?

xxviii

CONTENTS

W E B C A S E 12

Boise Cascade/Office Max
(Contributor: Maryanne M. Rouse)
Boise Cascade, an integrated manufacturer and distributor of paper, packaging, and wood products,
purchased OfficeMax, the third-largest office supplies catalogue retailer (after Staples and Office
Depot), in 2003. Soon thereafter, Boise announced that it was selling its land, plants, headquarters
location, and even its name to an equity investment firm. Upon completion of the sale in 2004, the
company assumed the name of OfficeMax. Can this manufacturer become a successful retailer?

W E B C A S E 13

H. J. Heinz Company
(Contributor: Maryanne M. Rouse)
Heinz, a manufacturer and marketer of processed food products, pursued global growth via market
penetration and acquisitions. Unfortunately, its modest sales growth was primarily from its
acquisitions. Now that the firm has divested a number of lines of businesses and brands to Del Monte
Foods, analysts wonder how a 20% smaller Heinz will grow its sales and profits in this very
competitive industry.

W E B C A S E 14

Nike Inc.
(Contributor: Maryanne M. Rouse)
Nike is the largest maker of athletic footwear and apparel in the world with a U.S. market share
exceeding 40%. Since almost all its products are manufactured by 700 independent contractors
(99% of which are in Southeast Asia), Nike is a target of activists opposing manufacturing practices
in developing nations. Although industry sales growth in athletic footwear is slowing, Nike refused
to change its product mix in 2002 to suit Foot Locker, the dominant global footwear retailer. Is it
time for Nike to change its strategy and practices?

W E B C A S E 15

Six Flags Inc.: The 2006 Business Turnaround
(Contributor: Patricia A. Ryan)
Known for its fast roller coasters and adventure rides, Six Flags has successfully built a group of
regional theme and water parks in the United States. Nevertheless, the company has not turned a
profit since 1998. Long-term debt had increased to 61% of total assets by 2005. New management is
implementing a retrenchment strategy, but industry analysts are unsure if this will be enough to save
the company.

W E B C A S E 16

Lowe’s Companies Inc.
(Contributor: Maryanne M. Rouse)
As the second-largest U.S. “big box” home improvement retailer (behind Home Depot), Lowe’s
competes in a highly fragmented industry. The company has grown with the increase in home
ownership and has no plans to expand internationally. With more than 1,000 stores in 2004, Lowe’s
intended to increase its U.S. presence with 150 store openings per year in 2005 and 2006. Are there
limits to Lowe’s current growth strategy?

W E B C A S E 17

Movie Gallery Inc.
(Contributor: J. David Hunger)
Movie Gallery is the second-largest North American video retail rental company, specializing in the
rental and sale of movies and video games through its Movie Gallery and Hollywood Entertainment
stores. Growing through acquisitions, the company is heavily in debt. The recent rise of online video
rental services, such as Netflix, is cutting into retail store revenues and reducing the company’s cash
flow. With just $135 million in cash at the end of 2005, Movie Gallery’s management finds itself facing
possible bankruptcy.

Preface
Welcome to the 13th edition of Strategic Management and Business Policy! Although the chapters
are the same as those in the 12th edition, many of the cases are new and different. We completely
revised seven of your favorite cases (Apple, Dell, Google, Carnival, Panera Bread, Whole
Foods, and Church & Dwight) and added 12 brand-new ones (iRobot, Rosetta Stone, Logitech,
Chrysler, Tesla Motors, TomTom, Volcom, TOMS Shoes, Best Buy, Dollar General, Boston
Beer, and Burger King) for a total of 19 new cases! More than half of the cases in this book are
new to this edition! Although we still make a distinction between full-length and mini cases, we
have interwoven them throughout the book to better identify them with their industries.
This edition continues the theme that runs throughout all 12 chapters: global environmental
sustainability. This strategic issue will become even more important in the years ahead, as all
of us struggle to deal with the consequences of climate change, global warming, and energy
availability. We continue to be the most comprehensive strategy book on the market, with
chapters ranging from corporate governance and social responsibility to competitive strategy,
functional strategy, and strategic alliances. To keep the size of the book manageable, we offer
special issue chapters dealing with technology, entrepreneurship, and not-for-profit organizations on the Web site (www.pearsonhighered.com/wheelen).

FEATURES NEW TO THIS 13th EDITION
Nineteen New Cases: Both Full Length and Mini Length
Eleven full-length new or updated comprehensive cases and eight mini-length cases have been
added to support the 16 popular full-length cases carried forward from past editions. Twelve
of the cases are brand new. Seven are updated favorites from past editions. Of the 35 cases
appearing in this book, 22 are exclusive and do not appear in other books.
Five of the new cases deal with technology issues (Apple, iRobot, Dell, Rosetta Stone,
and Logitech).
쏋 One of the new cases deals with the Internet (Google).
쏋

One new case involves entertainment (Carnival).
쏋 Three new cases are of old and new transportation firms (Chrysler, TomTom, and Tesla
Motors).
쏋 Two new cases are of entrepreneurial clothing companies (Volcom and TOMS Shoes).
쏋 Two new specialty retailing cases spotlight electronics (Best Buy) and variety (Dollar
General).
쏋 Five new cases come from the food, beverage, and restaurant industries (Boston Beer,
Panera Bread, Whole Foods Market, Burger King, and Church & Dwight).
쏋

HOW THIS BOOK IS DIFFERENT FROM OTHER
STRATEGY TEXTBOOKS
This book contains a Strategic Management Model that runs through the first 11 chapters
and is made operational through the Strategic Audit, a complete case analysis methodology.
The Strategic Audit provides a professional framework for case analysis in terms of external
xxix

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PREFACE

and internal factors and takes the student through the generation of strategic alternatives and
implementation programs.
To help the student synthesize the many factors in a complex strategy case, we developed
three useful techniques:
External Factor Analysis (EFAS) Table in Chapter 4
This reduces the external Opportunities and Threats to the 8 to 10 most important external factors facing management.
쏋 Internal Factor Analysis (IFAS) Table in Chapter 5
This reduces the internal Strengths and Weaknesses to the 8 to 10 most important internal
factors facing management.
쏋 Strategic Factor Analysis Summary (SFAS) Matrix in Chapter 6
This condenses the 16 to 20 factors generated in the EFAS and IFAS Tables into the 8 to 10
most important (strategic) factors facing the company. These strategic factors become the
basis for generating alternatives and a recommendation for the company’s future direction.
쏋

Suggestions for Case Analysis are provided in Appendix 12.B (end of Chapter 12) and
contain step-by-step procedures for how to use the Strategic Audit in analyzing a case. This
appendix includes an example of a student-written Strategic Audit. Thousands of students
around the world have applied this methodology to case analysis with great success. The
Case Instructor’s Manual contains examples of student-written Strategic Audits for each of
the full-length comprehensive strategy cases.

FEATURES FOCUSED ON ENVIRONMENTAL SUSTAINABILITY
Each chapter contains a boxed insert dealing with an issue in environmental sustainability.
쏋 Each chapter ends with Eco Bits, interesting tidbits of ecological information, such as the
number of plastic bags added to landfills each year.
쏋 Special sections on sustainability are found in Chapters 1 and 3.
쏋 A section on the natural environment is included in the societal and task environments in
Chapter 4.
쏋

TIME-TESTED FEATURES
This edition contains many of the same features and
content that helped make previous editions successful. Some of the features are the following:
쏋

A Strategic Management Model runs throughout the first 11 chapters as a unifying concept.
(Explained in Chapter 1)

PREFACE

xxxi

The Strategic Audit, a way to operationalize the strategic decisionmaking process, serves as a checklist in case analysis. (Chapter 1)
쏋 Corporate governance is examined in terms of the roles, responsibilities, and interactions of top management and the board
of directors and includes the impact of the Sarbanes-Oxley Act.
(Chapter 2)
쏋

FIGURE 3–1

Discretionary

Responsibilities
of Business

쏋

Social responsibility and managerial ethics are
examined in detail in terms of how they affect
strategic decision making. They include the
process of stakeholder analysis and the concept of
social capital. (Chapter 3)

쏋

Equal emphasis is placed on environmental scanning of the societal environment as well as on the
task environment. Topics include forecasting and
Miles and Snow’s typology in addition to competitive intelligence techniques and Porter’s industry
analysis. (Chapter 4)

Social
Responsibilities
Ethical

Economic

Legal

SOURCE: Based on A. B. Carroll, “A Three Dimensional Conceptual Model of Corporate Performance,” Academy
of Management Review (October 1979), pp. 497–505; A. B. Carroll, “Managing Ethically with Global Stakeholders:
A Present and Future Challenge,” Academy of Management Executive (May 2004), pp. 114–120; and A. B. Carroll,
“The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,”
Business Horizons (July–August 1991), pp. 39–48.

Core and distinctive competencies are examined within the framework of the resourcebased view of the firm. (Chapter 5)
쏋 Organizational analysis includes material on business models, supply chain management,
and corporate reputation. (Chapter 5)
쏋 Internal and external strategic factors are emphasized through the use of specially
designed EFAS, IFAS, and SFAS tables. (Chapters 4, 5, and 6)
쏋 Functional strategies are examined in light of outsourcing. (Chapter 8)
쏋

xxxii

PREFACE
쏋

쏋

Two chapters deal with issues in strategy implementation,
such as organizational and job design plus strategy-manager fit,
action planning, corporate culture, and international strategic alliances. (Chapters 9 and 10)

A separate chapter on evaluation and control explains the importance of measurement
and incentives to organizational performance. (Chapter 11)

Suggestions for in-depth case analysis provide a complete listing of financial ratios, recommendations for oral and written analysis,
and ideas for further research. (Chapter 12)

PREFACE

xxxiii

The Strategic Audit Worksheet is based on the time-tested
Strategic Audit and is designed to help students organize and
structure daily case preparation in a brief period of time. The
worksheet works exceedingly well for checking the level of
daily student case preparation—especially for open class discussions of cases. (Chapter 12)
쏋 Special chapters deal with strategic issues in managing
technology and innovation, entrepreneurial ventures and
small businesses, and not-for-profit organizations. (Web
Chapters A, B, and C, respectively) These issues are often
ignored by other strategy textbooks, but are available on this
book’s Web site at www.pearsonhighered.com/wheelen.
쏋

쏋

An experiential exercise focusing on the
material covered in each chapter helps the
reader to apply strategic concepts to an actual
situation.

A list of key terms and the pages in which they are discussed enable the reader to keep
track of important concepts as they are introduced in each chapter.
쏋 Learning objectives begin each chapter.
쏋 Each Part ends with a short case that acts to integrate the material discussed within
the previous chapters.
쏋 Timely, well-researched, and class-tested cases deal with interesting companies and
industries. Many of the cases are about well-known, publicly held corporations—ideal
subjects for further research by students wishing to “update” the cases.
쏋

Both the text and the cases have been class-tested in strategy courses and revised based on
feedback from students and instructors. The first 11 chapters are organized around a Strategic
Management Model that begins each chapter and provides a structure for both content and
case analysis. We emphasize those concepts that have proven to be most useful in understanding strategic decision making and in conducting case analysis. Our goal was to make the
text as comprehensive as possible without getting bogged down in any one area. Endnote
references are provided for those who wish to learn more about any particular topic. All cases
are about actual organizations. The firms range in size from large, established multinationals
to small, entrepreneurial ventures, and cover a broad variety of issues. As an aid to case
analysis, we propose the Strategic Audit as an analytical technique.

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PREFACE

SUPPLEMENTS
Instructor Resource Center
At www.pearsonhighered.com/irc, instructors can access teaching resources available with
this text in downloadable, digital format. Registration is simple and gives you immediate access to new titles and new editions. As a registered faculty member, you can download resource files and receive immediate access and instructions for installing course management
content on your campus server. In case you ever need assistance, our dedicated technical support team is ready to assist instructors with questions about the media supplements that accompany this text. Visit for answers to frequently asked questions
and toll-free user support phone numbers. The Instructor Resource Center provides the following electronic resources.

Instructor’s Manuals
Two comprehensive Instructor’s Manuals have been carefully constructed to accompany this
book. The first one accompanies the concepts chapters; the second one accompanies the cases.
Concepts Instructor’s Manual
To aid in discussing the 12 strategy chapters as well as the three web special issue chapters,
the Concepts Instructor’s Manual includes:
Suggestions for Teaching Strategic Management: These include various teaching
methods and suggested course syllabi.
쏋 Chapter Notes: These include summaries of each chapter, suggested answers to discussion questions, and suggestions for using end-of-chapter cases/exercises and part-ending
cases, plus additional discussion questions (with answers) and lecture modules.
쏋

Case Instructor’s Manual
To aid in case method teaching, the Case Instructor’s Manual includes detailed suggestions
for use, teaching objectives, and examples of student analyses for each of the full-length comprehensive cases. This is the most comprehensive Instructor’s Manual available in strategic
management. A standardized format is provided for each case:
1. Case Abstract
2. Case Issues and Subjects
3. Steps Covered in the Strategic Decision-Making Process
4. Case Objectives
5. Suggested Classroom Approaches
6. Discussion Questions
7. Case Author’s Teaching Note
8. Student-Written Strategic Audit, if appropriate
9. EFAS, IFAS, and SFAS Exhibits
10. Financial Analysis—ratios and common-size income statements, if appropriate

PowerPoint Slides
PowerPoint slides, provided in a comprehensive package of text outlines and figures corresponding to the text, are designed to aid the educator and supplement in-class lectures.

PREFACE

xxxv

Test Item File
This Test Item File contains over 1,200 questions, including multiple-choice, true/false, and
essay questions. Each question is followed by the correct answer, page reference, AACSB
category, and difficulty rating.

TestGen
TestGen software is preloaded with all of the Test Item File questions. It allows instructors to
manually or randomly view test questions, and to add, delete, or modify test-bank questions
as needed to create multiple tests.

Videos on DVD
Exciting and high-quality video clips help deliver engaging topics to the classroom to help
students better understand the concepts explained in the textbook. Please contact your local
representative to receive a copy of the DVD.

CourseSmart
CourseSmart eTextbooks were developed for students looking to save on required or recommended textbooks. Students simply select their eText by title or author and purchase immediate access to the content for the duration of the course using any major credit card. With a
CourseSmart eText, students can search for specific keywords or page numbers, take notes
online, print out reading assignments that incorporate lecture notes, and bookmark important
passages for later review. For more information or to purchase a CourseSmart eTextbook, visit
www.coursesmart.com.

Acknowledgments
We thank the many people at Prentice Hall/Pearson who helped to make this edition possible. We thank our editor, Kim Norbuta. We are especially grateful to Kim’s project manager,
Claudia Fernandes, who managed to keep everything on an even keel. We also thank
Becca Groves and Emily Bush, who took the book through the production process.
We are very thankful to Jeanne McNett, Assumption College; Bob McNeal, Alabama
State University; Don Wicker, Brazosport College; Dan Kipley, Azusa Pacific University;
Roxanna Wright, Plymouth State University; Kristl Davison, University of Mississippi;
Francis Fabian, University of Memphis; Susan Fox-Wolfgramm, Hawaii Pacific University;
Conrad Francis, Nova Southeastern University; and Gene Simko, Monmouth University for
their constructive criticism of the 12th edition cases. They helped us to decide which of our
favorite cases to keep and which to delete or update.
We are very grateful to Kathy Wheelen for her first-rate administrative support of the
cases and to Alan N. Hoffman for helping us with the Case Instructor’s Manual. We are
especially thankful to the many students who tried out the cases we chose to include in this
book. Their comments helped us find any flaws in the cases before the book went to the
printer.
In addition, we express our appreciation to Wendy Klepetar, Management Department
Chair of Saint John’s University and the College of Saint Benedict, for her support and
provision of the resources so helpful to revise a textbook. Both of us acknowledge our debt to

xxxvi

PREFACE

Dr. William Shenkir and Dr. Frank S. Kaulback, former Deans of the McIntire School of
Commerce of the University of Virginia, for the provision of a work climate most supportive
to the original development of this book.
We offer a special thanks to the hundreds of case authors who have provided us with
excellent cases for the 13 editions of this book. We consider many of these case authors to be
our friends. A special thanks to you!! The adage is true: The path to greatness is through others.
Lastly, to the many strategy instructors and students who have moaned to us about their
problems with the strategy course: We have tried to respond to your problems and concerns as
best we could by providing a comprehensive yet usable text coupled with recent and complex
cases. To you, the people who work hard in the strategy trenches, we acknowledge our debt.
This book is yours.
T. L. W.
Saint Petersburg, Florida

J. D. H.
St. Joseph, Minnesota

About the Contributors
MOUSTAFA H. ABDELSAMAD, DBA (George Washington University), is Dean of the College
of Business at Texas A&M University–Corpus Christi. He previously served as Dean of the
College of Business and Industry at University of Massachusetts–Dartmouth and as Professor
of Finance and Associate Dean of Graduate Studies in Business at Virginia Commonwealth
University. He is Editor–in-Chief of SAM Advanced Management Journal and International
President of the Society of Advancement of Management. He is author of A Guide to Capital
Expenditure Analysis and two chapters in the Dow Jones–Irwin Capital Budgeting Handbook.
He is the author and coauthor of numerous articles in various publications.
Hitesh (John) P. Adhia, CPA, MS and BA (University of South Florida), is the President and
Chief Investment Officer of Adhia Investment Advisors, Inc. (the “Firm”). Mr. Adhia is a CPA
and has been in the finace industry since 1982. Mr Adhia is the founder and Investment Manager for the Adhia Twenty Fund, and the Adhia Health Care Fund, the Adhia Short Term Advantage Fund, the Adhia Arbitrage Fund, and the Adhia Derivative Fund. Prior to forming
Adhia Investment Advisors, Mr. Adhia owned a Tampa-based public accounting practice and
also served as Acting CFO and Independent Advisor to the Well Care Group of Companies. Mr.
Adhia has over twenty years experience in managing fixed income strategies.
KAREN A. BERGER, PhD (M. Phil and New York University), MBA (University of Connecticut),
MA (Columbia University), and BA (S.U.N.Y. at Buffalo), is Chairperson of the Marketing
Department and Associate Professor of Marketing at Pace University. She previously held academic positions with New York University, Stern School of Business, and Mercy College. Berger
has published literature in the field of Marketing and has won several teaching awards.
CHRISTINE B. BUENAFE, student of The College of New Jersey, co-author with Joyce
Vincelette of the Rosetta Stone and Volcom cases in this edition.
BARNALI CHAKRABORTY, is a faculty member at the ICFAI Center for Management Research
(ICMR).
RICHARD A. COISER, PhD (University of Iowa), is Dean and Leeds Professor of Management
at Purdue University. He formerly was Dean and Fred B. Brown Chair at the University of
Oklahoma and was Associate Dean for Academics and Professor of Business Administration
at Indiana University. He served as Chairperson of the Department of Management at Indiana
University. For seven years prior to assuming his current position, he was a Planning Engineer
with Western Electric Company and Instructor of Management and Quantitative Methods at
the University of Notre Dame. Dr. Coiser is interested in researching the managerial decisionmaking process, organization responses to external forces, and participative management. He
has published in Behavior Science, Academy of Management Journal, Academy of Management Review, Organizational Behavior and Human Performance, Management Science,
Strategic Management Journal, Business Horizons, Decision Sciences, Personnel Psychology,
Journal of Creative Behavior, International Journal of Management, The Business Quarterly,
Public Administration Quarterly, Human Relations, and other journals. In addition, Dr. Coiser
has presented numerous papers at professional meetings and has coauthored a management

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ABOUT THE CONTRIBUTORS

text. He has been active in many executive development programs and has acted as managementeducation consultant for several organizations. Dr. Coiser is the recipient of Teaching
Excellence Awards in the MBA Program at Indiana and a Richard D. Irwin Fellowship. He belongs to the Institute of Management, Sigma Iota Epsilon, and the Decision Sciences Institute.
ROY A. COOK, DBA (Mississippi State University), is past Associate Dean of the School
of Business Administration and previously a Professor at Fort Lewis College, Durango, Colorado. He has written a best-selling textbook, Tourism: The Business of Travel, now in its
2nd edition, and has two forthcoming textbooks: Cases and Experiential Exercises in Human Resource Management and Guide to Business Etiquette. He has authored numerous articles, cases, and papers based on his extensive experience in the hospitality industry and
research interests in the areas of strategy, small business management, human resource management, and communication. Dr. Cook has served as the Director of Colorado’s Center for
Tourism Research® and Editor of The Annual Advances in Business Cases, and also on the
editorial boards of the Business Case Journal, the Journal of Business Strategies, and the
Journal of Teaching and Tourism. He is a member of the Academy of Management, Society
for Case Research (past President), and the International Society of Travel and Tourism Educators. Dr. Cook teaches courses in Strategic Management, Small Business Management,
Tourism and Resort Management, and Human Resource Management.
STEVEN M. COX, PhD (University of Nebraska), is an Associate Professor of Marketing,
McColl School of Business, Queens University of Charlotte. He has a 25-year career in executive level marketing and sales positions with AT&T, GE, and several satellite imaging companies. He owns and manages LSI, a geographic information system company. He currently serves
as a case reviewer for the Business Case Journal and the Southeast Case Research Journal.
DAVID B. CROLL, PhD (Pennsylvania State University), is Professor Emeritus of Accounting
at the McIntire School of Commerce, the University of Virginia. He was Visiting Associate Professor at the Graduate Business School, the University of Michigan. He is on the editorial board
of SAM Advanced Management Journal. He has published in the Accounting Review and the
Case Research Journal. His cases appear in 12 accounting and management textbooks.
DAN R. DALTON, PhD (University of California, Irvine), is the Dean of the Graduate School of
Business, Indiana University, and Harold A. Polipl Chair of Strategic Management. He was formerly with General Telephone & Electronics for 13 years. Widely published in business and
psychology periodicals, his articles have appeared in the Academy of Management Journal,
Journal of Applied Psychology, Personnel Psychology, Academy of Management Review, and
Strategic Management Journal.
CATHY A. ENZ, PhD (Ohio State University), is the Lewis G. Schaeneman Jr. Professor of
Innovation and Dynamic Management at Cornell University’s School of Hotel Administration. She is also the Executive Director of the Center for Hospitality Research at that institution. Her doctoral degree is in Organization Theory and Behavior. Professor Enz has
written numerous articles, cases, and books on corporate culture, value sharing, change
management, and strategic human resource management effects on performance. Professor
Enz consults extensively in the service sector and serves on the Board of Directors for two
hospitality-related organizations.
ELLIE A. FOGARTY, EdD (University of Pennsylvania), MBA (Temple University), MLS
(University of Pittsburgh), and BA (Immaculata University), is the Director of Compliance and
Ethics at The College of New Jersey (TCNJ). Previously, she served as the Associate Provost
for Planning and Resource Allocation, Executive Assistant to the Provost, and Business and

ABOUT THE CONTRIBUTORS

xxxix

Economics Librarian, all at TCNJ. She has written five cases used in earlier editions of
Strategic Management and Business Policy. She has taught management courses at both TCNJ
and Rutgers University.
GAMEWELL D. GANTT, JD, CPA, is Professor of Accounting and Management in the College
of Business at Idaho State University in Pocatello. Idaho, where he teaches a variety of legal
studies courses. He is past President of the Rocky Mountain Academy of Legal Studies in Business and a past Chair of the Idaho Endowment Investment Fund Board. His published articles
and papers have appeared in journals including Midwest Law Review, Business Law Review,
Copyright World, and Intellectual Property World. His published cases have appeared in several textbooks and in Annual Advances in Business Cases.
S. S. GEORGE is a faculty associate at the ICFAI Center for Management Research (ICMR).
NORMAN J. GIERLASINSKI, DBA, CPA, CFE, CIA, is Professor of Accounting at Central
Washington University. He served as Chairman of the Small Business Division of the Midwest
Business Administration Association. He has authored or coauthored cases for professional
associations and the Harvard Case Study Series. He has authored various articles in professional journals as well as serving as a contributing author for textbooks and as a consultant to
many organizations. He also served as a reviewer for various publications.
VIVEK GUPTA is a faculty member at the ICFAI Center for Management Research (ICMR).
RENDY HALIN, MBA and BS (Bentley University), is currently focusing on equity and commodity trading, as well as venturing on a new startup company. Actively involved in his church
ministry, he is also contributing his time and thought on how to properly manage the church’s
management and financial report effectively.
PATRICIA HARASTA, MBA (Bentley McCallum Graduate School of Business), is Director of
Quality Assurance at CA (formerly Computer Associates). She manages a distributed team
responsible for new development and maintenance QA activities for products that provide
management of applications such as SAP, Microsoft Exchange, Lotus Domino, WebSphere,
WebLogic, MQ, and Web Servers.
ALAN N. HOFFMAN, MBA, DBA (Indiana University), is Professor of Strategic Management
and Director of the MBA program at the McCallum Graduate School, Bentley University. His
major areas of interest include strategic management, global competition, investment strategy,
and technology. Professor Hoffman is coauthor of The Strategic Management Casebook and
Skill Builder textbook. His recent publications have appeared in the Academy of Management
Journal, Human Relations, the Journal of Business Ethics, the Journal of Business Research,
and Business Horizons. He has authored more than 20 strategic management cases including
The Boston YWCA, Ryka Inc., Liz Claiborne, Ben & Jerry’s, Cisco Systems, Sun Microsystems, Palm Inc., Handspring, Ebay, AOL/Time Warner, McAfee, Apple Computer, Tivo Inc.,
and Wynn Resorts. He is the recipient of the 2004 Bentley University Teaching Innovation
Award for his course: “The Organizational Life Cycle—The Boston Beer Company Brewers of
Samuel Adams Lager Beer.”
J. DAVID HUNGER, PhD (Ohio State University), is currently Strategic Management Scholar in
Residence at Saint John’s University in Minnesota. He is also Professor Emeritus at Iowa State
University where he taught for 23 years. He previously taught at George Mason University, the
University of Virginia, and Baldwin-Wallace College. He worked in brand management at Procter & Gamble Company, worked as a selling supervisor at Lazarus Department Store, and

ABOUT THE CONTRIBUTORS

served as a Captain in U.S. Army Military Intelligence. He has been active as a consultant and
trainer to business corporations, as well as to state and federal government agencies. He has
written numerous articles and cases that have appeared in the Academy of Management Journal, International Journal of Management, Human Resource Management, Journal of Business
Strategies, Case Research Journal, Business Case Journal, Handbook of Business Strategy,
Journal of Management Case Studies, Annual Advances in Business Cases, Journal of Retail
Banking, SAM Advanced Management Journal, and Journal of Management, among others.
Dr. Hunger is a member of the Academy of Management, North American Case Research
Association, Society for Case Research, North American Management Society, Textbook and
Academic Authors Association, and the Strategic Management Society. He is past President of
the North American Case Research Association, the Society for Case Research, and the Iowa
State University Press Board of Directors. He also served as a Vice President of the U.S. Association for Small Business and Entrepreneurship. He was Academic Director of the Pappajohn
Center for Entrepreneurship at Iowa State University. He has served on the editorial review
boards of SAM Advanced Management Journal, Journal of Business Strategies, and Journal of
Business Research. He has served on the Board of Directors of the North American Case
Research Association, the Society for Case Research, the Iowa State University Press, and the
North American Management Society. He is coauthor with Thomas L. Wheelen of Strategic
Management and Business Policy and Essentials of Strategic Management plus Concepts in
Strategic Management and Business Policy and Cases in Strategic Management and Business
Policy, as well as Strategic Management Cases (PIC: Preferred Individualized Cases), and a
monograph assessing undergraduate business education in the United States. The 8th edition of
Strategic Management and Business Policy received the McGuffey Award for Excellence and
Longevity in 1999 from the Text and Academic Authors Association. Dr. Hunger received the
Best Case Award given by the McGraw-Hill Publishing Company and the Society for Case
Research in 1991 for outstanding case development. He is listed in various versions of Who’s
Who, including Who’s Who in the United States and Who’s Who in the World. He was also
recognized in 1999 by the Iowa State University College of Business with its Innovation in
Teaching Award and was elected a Fellow of the Teaching and Academic Authors Association
and of the North American Case Research Association.
P. INDU is a student of Vivek Gupta at the ICFAI Center of Management Research (ICMR).
GEORGE A. JOHNSON, PhD, is Professor of Management and Director of the Idaho State
University MBA program. He has published in the fields of Management Education, Ethics,
Project Management, and Simulation. He is also active in developing and publishing case
material for educational purposes. His industry experience includes several years as a Project Manager in the development and procurement of aircraft systems.
SHAWANA P. JOHNSON, PhD (Case Western Reserve University), is president of Global Marketing Insights, Inc. She has 27 years of management and marketing experience in the Hi-Tech
Information and Geospatial Technology Industry with companies such as Lockheed Martin and
General Electric Aerospace.
MICHAEL KEEFFE, PhD (University of Arkansas), is Associate Professor of Management and
Chair of Undergraduate Assurance of Learning in the McCoy College of Business Administration, Texas State University. He was the developer and draft writer of the College of Business
policy and procedure system, co-director of initial AACSB-International accreditation efforts,
sponsor of the Alpha Chi University Honor Society for over a decade, and developed and implemented the Assurance of Learning system for the McCoy College. Additionally, he has been
Chair or Acting Chair of three departments in the college. With over a dozen journal articles and

ABOUT THE CONTRIBUTORS

xli

numerous refereed proceedings, Dr. Keeffe is an avid case writer with over 21 cases appearing
in 32 textbooks over the last 20 years.
JOHN A. KILPATRICK, PhD (University of Iowa), is Professor of Management and International Business, Idaho State University. He has taught in the areas of business and business
ethics for over 25 years. He served as Co-Chair of the management track of the Institute for
Behavioral and Applied Management from its inception and continues as a board member
for that organization. He is author of The Labor Content of American Foreign Trade, and is
coauthor of Issues in International Business. His cases have appeared in a number of organizational behavior and strategy texts and casebooks, and in Annual Advances in Business
Cases.
DONALD F. KURATKO is the Jack M. Gill Chair of Entrepreneurship, Professor of Entrepreneurship, and Executive Director of the Johnson Center for Entrepreneurship & Innovation at The
Kelley School of Business, Indiana University–Bloomington. He has published over 150 articles on aspects of entrepreneurship, new venture development, and corporate entrepreneurship.
His work has been published in journals such as Strategic Management Journal, Academy of
Management Executive, Journal of Business Venturing, Entrepreneurship Theory & Practice,
Journal of Small Business Management, Journal of Small Business Strategy, Family Business Review, and Advanced Management Journal. Dr. Kuratko has authored 20 books,
Entrepreneurship: Theory, Process, Practice, 7th edition (South-Western/Thomson Publishers,
2007), as well as Strategic Entrepreneurial Growth, 2nd edition (South-Western/Thomson Publishers, 2004), Corporate Entrepreneurship (South-Western/Thomson Publishers, 2007), and
Effective Small Business Management, 7th edition (Wiley & Sons Publishers, 2001). In addition,
Dr. Kuratko has been consultant on Corporate Entrepreneurship and Entrepreneurial Strategies
to a number of major corporations such as Anthem Blue Cross/Blue Shield, AT&T, United Technologies, Ameritech, The Associated Group (Acordia), Union Carbide Corporation, ServiceMaster, and TruServ. Before coming to Indiana University, he was the Stoops Distinguished
Professor of Entrepreneurship and Founding Director of the Entrepreneurship Program at Ball
State University. In addition, he was the Executive Director of The Midwest Entrepreneurial Education Center.
Dr. Kuratko’s honors include earning the Ball State University College of Business Teaching Award 15 consecutive years as well as being the only professor in the history of Ball State
University to achieve all four of the university’s major lifetime awards: Outstanding Young
Faculty (1987); Outstanding Teaching Award (1990); Outstanding Faculty Award (1996); and
Outstanding Researcher Award (1999). He was also honored as the Entrepreneur of the Year
for the state of Indiana and was inducted into the Institute of American Entrepreneurs Hall of
Fame (1990). He has been honored with The George Washington Medal of Honor; the Leavey
Foundation Award for Excellence in Private Enterprise; the NFIB Entrepreneurship Excellence Award; and the National Model Innovative Pedagogy Award for Entrepreneurship. In
addition, Dr. Kuratko was named the National Outstanding Entrepreneurship Educator (by the
U.S. Association for Small Business and Entrepreneurship) and selected as one of the Top 3
Entrepreneurship Professors in the United States by the Kauffman Foundation, Ernst & Young,
Inc. magazine, and Merrill Lynch. He received the Thomas W. Binford Memorial Award for
Outstanding Contribution to Entrepreneurial Development from the Indiana Health Industry
Forum. Dr. Kuratko has been named a 21st Century Entrepreneurship Research Fellow by the
National Consortium of Entrepreneurship Centers as well as the U.S. Association for Small
Business & Entrepreneurship Scholar for Corporate Entrepreneurship in 2003. Finally, he has
been honored by his peers in Entrepreneur magazine as one of the Top 2 Entrepreneurship

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ABOUT THE CONTRIBUTORS

Program Directors in the nation for three consecutive years including the #1 Entrepreneurship
Program Director in 2003.
RUCHI MANKAD is a former faculty member at the ICFAI Center for Management Research
(ICMR).
BILL J. MIDDLEBROOK, PhD (University of North Texas), is Professor of Management at
Southwest Texas State University. He served as Acting Chair of the Department of Management and Marketing, published in numerous journals, served as a consultant in industry,
and is currently teaching and researching in the fields of Strategic Management and Human
Resources.
BERNARD A. MORIN, B.S., M.B.A., Ph.D., Professor Emeritus of Commerce at the University
of Virginia.
NATHAN NEBBE, MBA and MA (Iowa State University), has significant interests in the indigenous peoples of the Americas. With an undergraduate degree in Animal Ecology, he
served as a Peace Corps Volunteer in Honduras, where he worked at the Honduran national
forestry school ESNAACIFORE (Escuela National de Ciencias Forestales). After some
time in the Peace Corps, Nathan worked for a year on a recycling project for the Town of
Ignacio and the Southern Ute Indian Tribe in southwestern Colorado. Following his experience in Colorado, Nathan returned to Iowa State University where he obtained his MBA,
followed by an MA in Anthropology. He is currently studying how globalization of the
Chilian forestry industry is affecting the culture of the indigenous Mapuche people of south
central Chile.
LAWRENCE C. PETTIT, Jr., B.S., M.S., D.B.A., Professor Emeritus of Commerce at the
McIntire School of Commerce University of Virginia.
ANNIE PHAN, BS (The College of New Jersey), is currently an associate at Goldman Sachs
Asset Management, and is an MBA candidate at New York University Leonard N. Stern School
of Business. In addition, she has assisted with research for The Global Corporate Brand Book.
SHIRISHA REGANI is a faculty associate at the ICFAI Center for Management Research
(ICMR).
JOHN K. ROSS III, PhD (University of North Texas), is Associate Professor of Management
at Southwest Texas State University. He has served as SBI Director, Associate Dean, Chair
of the Department of Management and Marketing, published in numerous journals, and is
currently teaching and researching in the fields of Strategic Management and Human
Resource.
SHERRY K. ROSS, CPA (Texas), MBA (Southwest Texas State University), is a Senior Lecturer
at Texas State University–San Marcos, Texas. She is the core course coordinator for financial
accounting and teaches introductory financial accounting courses. Her recent work experience
is Executive Director of a not-for-profit corporation.
MARYANNE M. ROUSE, CPA, MBA (University of South Florida) was a faculty member, Assistant Dean, and Director of Management Education and Development at the College of
Business Administration of the University of South Florida until her retirement.
PATRICIA A. RYAN, PhD (University of South Florida), is an Associate Professor of Finance,
Colorado State University. She currently serves on the Board of Directors of the Midwest
Finance Association and was the Associate Editor of the Business Case Journal. Her research

ABOUT THE CONTRIBUTORS

xliii

interests lie in corporate finance, specifically initial public offerings, capital budgeting, and
case writing. She has published in the Journal of Business and Management, the Business Case
Journal, Educational and Psychological Measurement, the Journal of Research in Finance,
the Journal of Financial and Strategic Decisions, and the Journal of Accounting and Finance
Research. Her research has been cited in the Wall Street Journal, CFO Magazine, and
Investment Dealers Digest.
RANGKI SON, MBA, earned his degree in Finance at the McCallum Graduate School of Business, Bentley University, in May 2007. He is currently working for KPMG Korea as a Business
Performance Service Consultant.
LAURENCE J. STYBEL, EdD (Harvard University), is cofounder of Stybel Peabody Lincolnshire,
a Boston-based management consulting firm devoted to enhancing career effectiveness of
executives who report to boards of directors. Its services include search, outplacement,
outplacement avoidance, and valued executive career consulting. Stybel Peabody Lincolnshire
was voted “Best Outplacement Firm” by the readers of Massachusetts Lawyers Weekly. Its
programs are the only ones officially endorsed by the Massachusetts Hospital Association and
the Financial Executives Institute. He serves on the Board of Directors of the New England Chapter of the National Association of Corporate Directors and the Boston Human Resources Association. His home page can be found at www.stybelpeabody.com. The “Your Career” department
of the home page contains downloadable back issues of his monthly Boston Business Journal
column, “Your Career.”
JOEL SAROSH THADAMALLA is a faculty member at the ICFAI center for Management Research
(ICMR).
MRIDU VERMA serves as a Consulting Editor at ICFAI Business School (ICMR).
JOYCE P. VINCELETTE, DBA (Indiana University), is a Professor of Management and the
Coordinator of Management and Interdisciplinary Business Programs at The College of New
Jersey. She was previously a faculty member at the University of South Florida. She has authored and coauthored various articles, chapters, and cases that have appeared in management
journals and strategic management texts and casebooks. She is also active as a consultant and
trainer for a number of local and national business organizations as well as for a variety of notfor-profit and government agencies. She currently teaches and conducts research in the fields of
Strategic Management and Leadership.
KATHRYN E. WHEELEN, MEd (Nova Southern University), BA, LMT, (University of
Tampa), has worked as an Administrative Assistant for case and textbook development with
the Thomas L. Wheelen Company (circa 1879). She works as a Special Education Teacher
in the Hillsborough County School District at Citrus Park Elementary School, Tampa,
Florida.
RICHARD D. WHEELEN, BS (University of South Florida), has worked as a case research
assistant. He is currently practicing in the field of Health Care. He currently lives in Everett,
Washington.
THOMAS L. WHEELEN, DBA (George Washington University), MBA (Babson College) and
BS cum laude (Boston College), has taught as Visiting Professor at Trinity College of the
University of Dublin, University of South Florida as Professor of Strategic Management, the
McIntire School of Commerce of the University of Virginia as the Ralph A. Beeton Professor
of Free Enterprise, and Visiting Professor at both the University of Arizona and Northeastern

xliv

ABOUT THE CONTRIBUTORS

University. He was also affiliated with the University of Virginia College of Continuing
Education, where he served in the following capacities: (1) Coordinator for Business Education (1978–1983, 1971–1976)—approve all undergraduate courses offered at seven regional
centers and approved faculty; (2) Liaison Faculty and Consultant to the National Academy of
the FBI Academy (1972–1983) and; (3) developed, sold, and conducted over 200 seminars for
local, state, and national governments, and companies for McIntire School of Commerce and
Continuing Education. He worked at General Electric Company, holding various management
positions (1961–1965); U.S. Navy Supply Corps (SC)–Lt. (SC) USNR–Assistant Supply
Officer aboard nuclear support tender (1957–1960). He has been published in the monogr…
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