戰(zhàn)略管理競爭性和全球化概念

戰(zhàn)略管理競爭性和全球化概念&案件

Competitivenessandglobalization:

Concepts&Cases

ThirdEdition

Hitt,Ireland,Hoskisson

ChapterIStrategicManagementandStrategicCompetitiveness

Chapter2TheExternalEnvironmentOpportunities,Threats,Indust

CompetitionandCompetitorAnalysis

Chapter3TheinternalEnvironment:Resources,Capabilitiesand

CoreCompetencies

Chapter4Business-LevelStrategy

Chapter5CompetitiveDynamics

Chapter6CorporateLevelStrategy

Chapter7AcquisitionsandRestructuring

Chapter8InternationalStrategy

Chapter9CooperativeStrategies

Chapter10CorporateGovernance

Chapter11OrganizationalStructureandControl

Chapter12StrategicLeadership

Chapter13CorporateEntrepreneurshipandinnovation

CHAPTER1

STRATEGY&STRATEGICCOMPETITIVENESS

LearningObjectives:

1.Understandthe

1.Definestrategiccompetitiveness,competitiveadvantageandabove-a

veragereturns.

2.Discussthechallengeofstrategicmanagement.

3.Describethenewcompetitivelandscapeandhowitisbeingshape

dbyglobaland

technologicalchanges.

4.Usetheindustrialorganization(I/O)modeltoexplainbowfirmsc

anearnabove-average

returns.

5.Usetheresourcesbasedmodeltoexplainhowfirmscanearnabo

veaverage-returns.

6.Describestrategicintentandstrategicmissionanddiscusstheirval

uetothestrategic

managementprocess.

7.Definestakeholdersanddescribethethreeprimarystakeholdergro

ups'abilitytoinfluence

organizations.

8.Describetheworkofstrategists.

9.Explainthestrategicmanagementprocess.

ChapterOutlines

1.StrategyandStrategicManagement

TheChallengeofStrategicManagement:

Theglobaleconomyandglobalization,

Technologicalchangeanddiffusion,

Theinformationageandincreasingknowledgeintensity

3.TheI/OModelofAbove-AverageReturns

TheResource-basedModelofAbove-AverageReturns

StrategicIntentandStrategicMission

Stakeholders

OrganizationalStrategists

ReviewQuestions

TeachingFocus:Itmaybeverygoodtobeginthislecturewithage

neralcommentthat

ChapterIprovidesanoverviewofthestrategicmanagementprocess.

InthisChapter,the

Authorsintroducesanumberoftermsandmodelsthatstudentswill

studyinmoredetailin

Chapters2through13.Stresstheimportanceofstudentspayingcar

efulattentiontothe

conceptsintroducedinthisChaptersothattheyarewellgroundedin

thestrategic

managementconceptbeforeproceedingfurther.

industryandtheeffectsofthesechangesontheindustry'scompetitiv

elandscape.

TheFederalCommunicationsCommissionvotedtoallowforeigncom

paniesincreasedaccesstotheU.S.market.

AWorldTradeOrganizationAgreementsaw69countriesagreetoop

entheir

previouslyprotectedfranchisesarenowopentoforeignanddomestic

competition.

Theabilityoffirmstocompetesuccessfullyinthisnewcompetitive

landscape,willbe

AsimpliedbytheChaptertitle-strategicManagementandStrategic

Competitivenessand

primarypurposeofthestrategicmanagementprocessistoenablefir

mstoachievestrategic

competitivenessandearnabove-averagereturns.Anin-depthdiscussio

nofinternational(global)

strategieswillbefoundinChapter8.

Definitions:

strategy

Strategiccompetitivenessisachievedwhenafirmsuccessfullyformul

atesandimplementsavalue-creatingstrategy.Byimplementingavalue-cr

eatingstrategythatcurrentandpotentialcompetitorsarenotsimultaneous1

yimplementingandthatcompetitorsareunabletoduplicatethebenefits

of,afirmachievesasustainedorsustainablecompetitiveadvantage.

Aboveaveragereturnsrepresentreturnsthatexceedreturnsthatinves

torsexpecttoearnfromotherinvestmentswithsimilarlevelsofrisk(in

vestoruncertaintyabouttheeconomicgainsorlossesthatwillresultfrom

aparticularinvestment).Inotherwords,aboveaverage-returnsexceedin

vestors'expectedlevelsofreturnforgivenlevelsofrisk..Solongasaf

irmcansustain(ormaintain)acompetitiveadvantage,investorswillearn

above-averagereturns.

Teachingsuggestion:Pointoutthat,inthelongrun,firmsmustearn

atleastaveragereturns

andprovideinvestorswithaveragereturnsiftheyaretosurvive.If

afirmearnsbelowaverage

returnsandprovidesinvestorswithbelow-averagereturns,investorsw

illwithdrawtheirfunds

andplacethemininvestmentsthatearnatleastaveragereturns.

StrategicManagementProcessisaframeworkthatcanassistfirmsin

theirquestforstrategiccompetitiveness,itisthefullsetofcommitment

s,decisionsandactionsrequiredforafirmtosystematicallyachievestrat

egiccompetitivenessandearnabove-averagereturns-Thisprocessisillust

ratedinFigure1-1.

Thedynamicnatureofthestrategicmanagementprocessisindicated

byfeedbacklinkages

amongthethreeprimaryelements:strategicinputs,strategicactionsa

ndstrategicoutcomes.

Strategicinputs,intheformofinformationgainedbyscrutinizingthe

internalenvironment

andscanningtheexternalenvironmentareusedtodevelopthefirm's

strategicintentand

strategicmission.

Strategicactionsareguidedbythefirm'sstrategicintentandstrateg

icmission,andarerepresentedbystrategiesthatareformulatedordevelo

pedandsubsequentlyimplementedorputintoaction.

Strategicoutcomeistheresultofafirm'sstrategyimplemented.A

desiredstrategicoutcomestrategiccompetitivenessandabove-averageretu

msresultwhenafirmisabletosuccessfullyformulateandimplementv

alue-creatingstrategiesthatothersareunabletoduplicate.

Feedbacklinkstheelementsofthestrategicmanagementprocesstoge

therandhelpsfirms

continuouslyadjustorrevisestrategicinputsandstrategicactionsin

ordertoachievedesired

strategicoutcomes.

ThisChapteralsowilldiscusstwoapproachestothestrategicmanag

ementprocess.Thefirst,

theindustrialorganizationmodel,suggeststhattheexternalenvironme

ntshouldbeconsideredastheprimarydeterminantofafirm'sstrategica

ctions.Thesecondistheresource-basedmodel,

whichperceivesthefirm'sresourcesandcapabilities(theinternalen

vironment)ascriticallinks

tostrategiccompetitiveness.FollowingthediscussioninthisChapter,

aswellasinChapters2

and3,studentsshouldseethatthesemodelsmustbeintegratedtoa

chievestrategicCompetitiveness.

THECHALLENGEOFSTRATEGICMANAGEMENT

Asnotedinearliercomments,allfirms—andmanagers—arechallenged

toachievestrategic

competitivenessandearnabove-averagereturns.And,thechallengeca

nbeformidable.A

primarychallengefacingmanagerstodayistheneedtorecognize—as

illustratedbythecomments

onsuchfirmsasIBM,UnionPacific,HondaandTheLimited—thatt

hestrategicmanagement

processandthestrivingforstrategiccompetitivenesstakesplaceina

dynamicglobaleconomy.

Asaresultofthisongoingstruggle,successtodaydoesnotnecessari

lyequatewithsuccess

tomorrow.

Hondahashadtomakemajorchangestosurviveintheglobalauto

mobilemarket.Inits

attempttomakeitsflagshipAccordmoresporty,itfoundthattheca

rwastoosmalltosatisfythe

expectationsandnotsportyenoughtosatisfyJapanesebuyers.Asa

result,ithasdesignedthe

Accordarounda''worldcar"designwithalterationstomeetdifferen

tmarketexpectations.Its

U.S.Accordisnowlarger,theJapanesemodelissmallerandcontai

nsmoreofthehigh-

technologyfeaturesdesiredbyJapanesebuyersandasmallerEuropea

nversionhasbeen

introduced.

TABLE1-1TopTenWealthCreators

AsshowninTable1-1,Coca-ColaandGeneralElectriccontinueto1

eadtheleastofwealth

creatorsforthesecondconsecutiveyearstheyhavecreatedmorewea

1th(measuredbymarket

valueadded)thanotherU.S.firms.However,Thebalanceofthelisti

ngindicatestheshifting

natureofsuccessfortheotherfirms.

Since1992,Microsofthasimprovedfromnumber14tonumberthre

eonthelist.

Whiletheotherchangesinthelisthavenotbeenasdramaticastho

sereportedforMicrosoft

resultedinashufflingofpositionsfortheotherfirmsonthelist.

Thetransientnatureofstrategiccompetitivenessispointedouteven

moreclearlywhenone

Realizethatonly2ofthe25largestU.S.industrialcorporationsin1

900remaincompetitivein

the1990sandthatfourmembersof1997'stoptenwerenotamong

thetoptenin1992

theyhaveinthepastiftheyhopetoachievelong-termstrategiccom

petitiveness.Onekeyto

successwillbewhichfirms'strategieswillrepresentthebestfitbet

weenthedemandsofthe

externalenvironmentandtheresourcesandcapabilitiesintheirrespec

tiveinternalenvironments.

THENEWCOMPETITIVELANDSCAPE

Thisnewcompetitivelandscapecanbedescribedasoneinwhichth

efundamentalnatureof

competitionischanginginanumberoftheworld'sindustries.And,t

heboundariesofindustries

arebecomingblurredandmoredifficulttodefine.

Considerchangesthathavetakenplaceintheentertainmentandcom

municationsindustries:

Traditionalbroadcastnetworks—ABC,NBCandCBS—nowmustcomp

etewithcablenetworkssuchasESPN,A&E,HBOandShowtimeaswel

1aswithcablesystems.

RupertMurdoch'sNewsCorp,(owneroftheFoxNetwork)formeda

strategicalliancewith

Disney's1996purchaseofCapCities/ABChasresultedinamedian

etworkthatincludesa

broadcastnetwork(ABC),acablestation(TheDisneyChannel)asw

ellasmotionpicture

productionanddistribution,newspapers,magazinesandthemeparks.

InnovativecompaniessuchasAT&T,SonyandMicrosofthaveindica

tedthattheyare

interestedinparticipatinginthisnewentertainment-communicationsin

dustry.

Thenewcompetitivelandscapethusimpliesthattraditionalsourceso

fcompetitiveadvantage

economiesofscaleandlargeadvertisingbudgets-maynotasimport

antinthefutureasthey

wereinthepast.Therapidandunpredictabletechnologicalchangeth

atcharacterizesthisnew

competitivelandscapeimpliesthatmanagersmustadoptnewwaysof

thinking.Thenew

competitivemindsetmustvalueflexibility,speed,innovationandinte

gration.

Atermoftenusedtodescribethenewrealitiesofcompetitionishyp

ercompetition,acondition

thatresultsfromthedynamicsofstrategicmovesandcountermoves

amonginnovative,global

firms:aconditionofrapidlyescalatingcompetitionthatisbasedon

price-qualitypositioning.

battlestoachievefirst-moveradvantageandbattlestoprotectortoi

nvadeestablishedproductor

geographicmarkets(thatwillbediscussedinmoredetailinChapter

5).

Teachingsuggestion;Twoprimarydriversofthenewcompetitivelan

dscapeareillustratedin

Figure1-2

TheNewCompetitiveLandscape

1.Technologyandtechnologicalchange

Technologyischangingrapidly

Technologydiffusesrapidly,notonlyacrosscompanyboundariesbut

alsoacrossnationalborders.

Informationtechnologyischangingbothrapidlyanddramatically.

Knowledgeisbecomingincreasinglyimportant

2.Theglobaleconomy

People,goods,servicesandideasmovefreelyacrossgeographicbord

ers

Significantopportunitiesemergeinmultipleglobalmarkets

Marketsandindustriesarebecomingmoreinternalized

TheGlobalEconomy

Aglobaleconomyisoneinwhichgoods,services,people,skillsand

ideasmovefreelyacross

geographicborders.

Also,globalizationisreferredtoastheshifttowardamoreintegrate

dandinterdependentworldeconomy.Globalizationhastwomaincompo

nents:theglobalizationofmarketsandtheglobalizationofproduction.

TheGlobalizationofMarkets

Theglobalizationofmarketsreferstothemergingofhistoricallydist

inctandseparatenationalmarketsintoonehugeglobalmarketplace.

Thetastesandpreferencesofconsumersindifferentnationsarebegi

nningtoconvergeonsomeglobalnorm,therebyhelpingtocreateaglob

almarket.TheglobalacceptanceofconsumerproductssuchasCiticorp

creditcards,Coca-Cola,Levi'sjeans,SonyWalkmans,Nintendogamepla

yers,andMcDonald'shamburgersareallfrequentlyheldupasprototypica

1examplesofthistrend.

Theexpansionofsomehugefirmscreatesaglobalmarket.Firmssu

chasCiticorp,Coca-Cola,McDonald's,andLeviStraussaremorethanju

stbenefactorsofthistrend;theyarealsoinstrumentalinfacilitatingit.

Byofferingastandardizedproductworldwide,theyarehelpingtocreate

aglobalmarket.

Marketsforindustrialgoodsandmaterialsthatserveauniversalneed

theworldoversuchasaluminum,oil,andwheat,themarketsforindust

rialproductssuchasmicroprocessors,DRAMs(computermemorychips),

andcommercialjetaircraft;andthemarketsforfinancialassetsfromUS

TreasuryBillstoeurobondsandfutureshavebecomeglobalmarkets.Mar

ketsforconsumerproductsarestilloftentoactasabrakeonglobalizati

onbecauseofthenationaldifferencesintastesandpreferences.

diversityisreplacedbygreateruniformity,becausesomefirms,espec

iallysomemultinationalcompaniesbringwiththemmanyoftheassetsth

athaveservedthemwellinothernationalmarkets—includingtheirproduc

ts,operatingstrategies,marketingstrategies,andbrandnames-creatingac

ertaindegreeofhomogeneityacrossmarkets.Thus,diversityisreplacedb

ygreateruniformity.Asrivalsfollowrivalsaroundtheworld,thesemult

inationalenterprisesemergeasanimportantdriveroftheconvergenceof

differentnationalmarketsintoasingle,andincreasinglyhomogenous,gio

balmarketplace.Duetosuchdevelopments,inanincreasingnumberof

industriesitisnolongermeaningfultotalkabout"theGermanmarket,"

"theAmericanmarket,""theBrazilianmarket,"or"theJapanesemarket";

formanyfirmsthereisonlytheglobalmarket.

Theemergenceofthisglobaleconomyresultsinanumberofchalle

ngesandopportunities.

Forinstance,manynowconsiderEuropetobetheworld'slargestsin

glemarket(despitethe

difficultiesofadaptingtomultiplenationalculturesandthelackofa

singlecurrency).

IncludingthenationsthatmakeuptheformerSovietUnionandthe

restoftheEasternbloc,the

Europeaneconomyhasagrossdomesticproduct(GDP)of$5trillio

nwith700million

potentialcustomer.Inaddition,Chinaisseenasanemerginggiantth

atisexpectedtohavea

higherGDP(butalowerpercapitaoutput)thanJapanby2015ors

ooner.

Intheeyesofmanyobservers,theU.S.,EuropeandJapanarerelati

velyequalcontendersinthe

racetobethemostcompetitivenationoreconomicblocinthe21st

century.And,exportsare

becominganevenmoreimportantsegmentoftheeconomy,especiall

yintheU.S.,asindicated

bythefollowing:

42%ofU.S.economicgrowthwasbasedonexports

1997,upfrom21%in1991

Thecompetitiveadvantageinglobaltechnologyisexpectedtodrive

continuedexportgrowth

forU.Sfirmsintothe21stcentury

Whilelargefirmsmaycommitresourcestoglobalmarketsmorequic

klythansmallandmid-

sizefirms,in1995,overone-half(50%)ofU.S.midsizecompanies

werecompetingin

marketsoutsideoftheU.S.

U.S.firmsaresuccessfullypenetratingJapan'shigh-tech,automobile,

consumergoodsand

retailingmarkets

In1995,U.S.exportsincreased12%over1994,exceeding$800bill

ion

Exportsareexpectedtoreachthe$1trillionlevelby1998

ThelargestshareofU.S.exportscurrentlygotoEurope,Canadaand

Japan

ThefastestgrowthindemandforU.S.goodsandservicesisprojecte

dtobeinAsianmarkets

(excludingJapan);from1996to2000,expectedannualgrowthis12

%.

TheMarchofGlobalization

Globalizationisthespread(ordiffusion)ofeconomicinnovationsaro

undtheworldandthe

politicalandculturaladjustmentsthataccompanythisdiffusion.

Inessence,globalizationseemstohavegatheredamomentumofits

ownbecauseof

increasedlevelsofinterdependenceamongindustrializednations

theneedsofdevelopingcountries

thecontinuingdisintegrationordroppingoftradebarriers

intensifiedinternationalintegrationofmultiplenationalopportunities

financialcapitalmaybeexportedbetweennationalmarkets

manufacturingequipmentpurchasedinathirdnationmaybeinstalled

inplantsaroundtheworld

rawmaterialsmaybesourcedfromavarietyofnationalmarkets,im

portedintostill

othernationalmarketsforproductionandthenfinishedproductsexpo

rtedalloverthe

globe.

Theinternationalizationorglobalizationofmarketsandindustriesofte

nmakesit

impracticaltoclassifymanyfirmsaspurelydomesticorforeign.Con

siderHonda,amajor

playerintheglobalautomobileindustry,whichrecently.

employedsome14,300peopleintheU.S,

sold660,000unitsintheU.S.(73%wereproducedintheU.S.)

used75%U.S.contentinthecarsmanufacturedintheU.S.

purchased$2.9billionofpartsfromU.S.suppliers

paid$21/2billioninfederalincometaxes

invested$3billiononaU.S.researchanddevelopmentcenter

exported40,000carsmadeintheU.S.toothernationalmarkets,incl

udingJapan

Teachingsuggestion;ThefollowingStrategicFocuscanbeusedtodi

scussthe

dynamicsofglobalizationandthechallengespresentedtofirms.

StrategicFocusTheMarchofGlobalizationWal-Mart,ChinaandBe

yond

Withitsrecentmoves,Wal-Martisextendingitsreachbeyonditsdo

minantpositioninU.S.

retailing,byexportingitsformulaforsuccessintoglobalmarkets.

.Wal-MarthaspurchasedCifraSA,itsformerjointventurepartnerin

Mexicofor$1.2billion

IthasexpandeditstraditionalinternationalfocusbeyondCanadaand

Mexicobyopening

superstoresinArgentina,Brazil,IndonesiaandChina

But,Wal-Martisnottheonlyfirmthatisfollowingthemarchtowar

dglobalization.

Motorolahasinvested$2billiontodevelopafabricationplantinCh

ina

EnronhasenteredintoajointventurewithSingaporePowertodevel

oppowerprojects

throughoutAsia

Citgo,thelargestgasolineretailerintheU.S.,isownedbyPetroleu

mdeVenezuela.

Whileglobalizationseemsanattractivestrategyforcompetinginthe

newcoinpetitive

landscape,therearerisksaswell.Theseincludesuchfactorsas:

Buildingthefirm'sabilitytosuccessfullymanageoperationsinmulti

pieforeign

markets

Thedifficultiesmayaccompanyventuringintotoomanyinternational

markets

tooquickly

Note;Indicatethattherisksthatoftenaccompanyinternationalization

and

strategiesforminimizingtheirimpactonfirmswillbediscussedin

moredetailin

Chapter8.

Becauseofitseconomicbenefits,itis1汰elythatthetrendtowardfu

rtherglobalization

ofindustrieswillbeunstoppable.Forexample,usingtheEurope-U.S.

-JapanTriadasan

example,freetradeisexpectedtopositivelyimpacttheTriadwitha

5to10%increaseinannualeconomicoutputsofmanufacturedgoods

anda

15to20%additionalincreaseineconomicoutputsfromfreetradein

services

Thispotentialforcontinuedeconomicgrowthmeansthatallindustria

lizednationsmust

continuetoseektheexpansionofagreements—suchastheEuropean

Union,NAFTAand

GAAT—thatwilleliminatenationallawsthatimpedefreetradeamong

allnations.

Asaresultofthenewcompetitivelandscape,firmsofallsizesmust

re-thinkhowthey

canachievestrategiccompetitivenessbypositioningthemselvestoask

questionsfroma

moreglobalperspectivetoenablethemto(atleast)meetorexceed

globalstandards:

Whereshouldvalue-addingactivitiesbeperformed?

Wherearethemostcost-effectivemarketsfornewcapital?

Canproductsdesignedinonemarketbesuccessfullyadaptedforsale

inother

markets?

Howcanwedevelopcooperativerelationshipsorjointventureswith

otherfirmsthat

willenableustocapitalizeoninternationalgrowthopportunities?

Companiesofallsizesandinallindustrieswillcontinuetofeelcont

inuingpressure

fromglobalization,especiallyasAsianmarketscontinuetodevelopo

utsideofJapan.Andthecontinuingincreaseofglobalizationandthespre

adofinformationtechnologywilllikelyenableothercountriestodevelop

theirindustrialbasesaswell.

Asaresultofglobalizationandthespreadofinformationtechnology,

competitionwill

becomemoreintense.Forexample,

Customers—evendomesticcustomers—willcontinuetoexpecthighlev

elsofproduct

qualityatcompetitiveprices

Globalcompetitionwillcontinuetopressurecompaniestoshortenpr

oduct

Development—introductiontimeframes

Strategicallycompetitivecompaniessuccessfullyleverageinsightslear

nedbothin

domesticandglobalmarkets,modifyingthemasnecessary

Beforeacompanycanhopetoachieveanymeasureofsuccessingl

obalmarkets,it

mustbestrategicallycompetitiveinitsdomesticmarket

TechnologyandTechnologicalChange

Threetechnologicaltrendsandconditionsaresignificantalteringthe

natureofcompetition:

increasingrateoftechnologicalchangeanddiffesion

theinformationage

increasingknowledgeintensity

IncreasingRateofTechnologicalChangeandDiffusion

Boththerateofchangeandtheintroductionofnewtechnologieshav

eincreasedsignificantoverthelast20years.

Atermthatisusedtodescriberapidandconsistentreplacementofc

urrenttechnologiesbynew,information-intensivetechnologiesisperpetual

innovation.Thisimpliesthatinnovation—tobediscussedinmoredetaili

nChapter13—mustbecontinuousandcarryahighpriorityforallorgan

izations.

Theshorterproductlifecyclesthatresultfromrapiddiffusionofinn

ovationoftenmaymeanthatproductswillbecomeindistinguishablefrom

eachother,placingacompetitivepremiumonafirm'sabilitytorapidlyi

ntroducenewproductsintothemarketplace.Infact,speed-to-marketmay

becomethesolesourceofcompetitiveadvantage.

TheInformationAge

Changesininformationtechnologyhavemaderapidaccesstoin

formationavailabletofirmsallovertheworld,regardlessofsize.Consid

erhowtheincreaseinthenumberofrelativelyinexpensivepersonalcom

puters(PCs),theirlinkagethroughcomputernetworks,cellularphonesand

theabilitytoaccessmassivedatabaseshavecombinedtoincreasethes

peedanddiffusionofinformationandinformationtechnologiesaswellas

toturntheabilitytoaccessanduseinformationintoapotentialsource

ofcompetitiveadvantage:

increaseinthenumberandpower(orcapability)ofPCrmation

-carryinginfrastructureavailabletofirmsworld-widethroughtheInternet

andWorldWideWeb

companiesbeingwiredtolinkthemselvestocustomers,employees,v

endorsandsuppliersaroundtheglobe

tradeconductedontheInternetisexpectedtoincreasedramaticallyfr

om$7.8billionin

1997to$105billionby2000

Thecontinuedrapidintroductionanddiffusionofnewinformationtec

hnologiesalsomayhaveinterestingimplicationsforfirmssuchasAmeric

aOnline(AOL),astheybattletobothunderstandandcreateusers'future

informationaccessanduseneeds.

Tobetterpositionitself,AOLacquireditslargestcompetitor,CompuS

erve,throughanagreementwithWorldCom.Asaresult,AOLhasincreas

editsrevenuesalmost40-fold,from$53millionin1993to$2billionin

1997.

IncreasingKnowledgeintensity.

expertise—maynotonlybeacriticalorganizationalresource,butmay

beasourceof

competitiveadvantage.Asaresult:

Organizationsmustimprovetheirabilitytotransformtheaccumulated

knowledgeofemployeesintoafirmasset

Shareholdervaluecanbepositivelyimpactedbythevalueofafirm'

sintangible

assets,suchasknowledge(Note;Intangibleassetswillbediscussed

morefullyinChapter3.)

Thismeansthat,toachievecompetitiveadvantageinthenew,inform

ation-intensive

competitivelandscape,firmsmustmovebeyondaccessinginformation

toexploitinginformationby:

Embeddingitasorganizationallearning

Diffusingitrapidlythroughouttheorganization

Theimplicationofthisdiscussionisthat,toachievestrategiccompet

itivenessandearnabove-averagereturns,firmsmustdeveloptheabilityto

adaptrapidlytochangeorachievestrategicflexibility.

Strategicflexibilityrepresentsthesetofcapabilitiesinallareasoft

heiroperationsthatfirmsusetorespondtothevariousdemandsando

pportunitiesthatarefoundindynamic,uncertainenvironments.Thisimpli

esthatfirmsmustdevelopcertaincapabilities,including

Organizationalslackswhichaffordsfirmswiththeabilitytorespond

toenvironmentalchanges.

Thecapacitytolearncontinuously,whichprovidethefirmwithnew

skill-sets.

Teachingsuggestion;Usethetext'sexampleofCoca-Cola'sdevelop

mentofaneffectivedistributionsystemandtheestablishmentofanchorb

ottlers—intheirglobalbottlingnetwork-tobuildtheresourcesandexpertis

enecessarythatenableCoca-Colatoenablethestrategicflexibilitythatw

illenablethemtotakeadvantageofopportunitiesacrossabroadrangeof

globalmarkets.

Twomodelsdescribingkeystrategicinputstoafirm'sstrategicactio

nsarenextdiscussed:theIndustrialOrganization(orexternally-focused)

modelandtheResource-based(orinternally-focused)model.

THEI/OMODELOFABOVEARAGERETURNS

Teachingsuggestion;Therecommendedteachingstrategyforthissect

ionistofirstdiscuss

theassumptionsunderlyingtheI/Omodel.Then,useFigure1-3toi

ntroducelinkagesinthe

I/Omodelandprovidethebackgroundforanexpandeddiscussionof

themodelinChapter2.TheI/OorIndustrialOrganizationmodeladopts

anexternalpe