It is a clear and complete summary of chapters 7 through 11 of Johnson's “Exploring Strategy”, Whittington et al. The summary is based on the twelfth edition of the book.
May contain sentence or spelling errors, have no longer done full language control.
Samenvatting ‘Exploring Strategy; tekst and
cases’
ISBN: 978-1-292028245 (Eleventh edition)
CH7
CH8
CH9
CH11
CH10
,Inhoudsopgave
Chapter 7: Business strategy and models ......................................................................................................................... 3
7.1 Introduction ............................................................................................................................................................ 3
7.2 Generic competitive strategies ............................................................................................................................... 3
7.3 Interactive strategies .............................................................................................................................................. 4
7.4 Business models ...................................................................................................................................................... 5
Chapter 8: Corporate strategy and diversification ........................................................................................................... 6
8.1 Introduction ............................................................................................................................................................ 6
8.2 Strategy directions .................................................................................................................................................. 6
8.3 Diversification drivers ............................................................................................................................................. 7
8.4 Diversification and performance ............................................................................................................................ 7
8.5 Vertical integration ................................................................................................................................................. 7
8.6 Value creation and corporate parent ..................................................................................................................... 8
8.7 Portfolio matrices.................................................................................................................................................... 8
Chapter 9: International strategy ................................................................................................................................... 10
9.1 Introduction .......................................................................................................................................................... 10
9.2 Internationalisation drivers................................................................................................................................... 10
9.3 Geographic sources of advantage......................................................................................................................... 11
9.4 International strategies ......................................................................................................................................... 11
9.5 Market selection and entry ................................................................................................................................... 12
9.6 Subsidiary roles in an international portfolio ....................................................................................................... 14
9.7 Internationalisation and performance .................................................................................................................. 14
Chapter 10: Entrepreneurship and innovation ............................................................................................................... 15
10.1 Introduction ........................................................................................................................................................ 15
10.2 Entrepreneurship ................................................................................................................................................ 15
10.3 Innovation dilemmas .......................................................................................................................................... 16
10.4 Innovation diffusion ............................................................................................................................................ 17
10.5 Innovators and imitators..................................................................................................................................... 17
Chapter 11: Mergers, acquisitions and alliances ............................................................................................................ 19
11.1 Introduction ........................................................................................................................................................ 19
11.2 Organic development.......................................................................................................................................... 19
11.3 Mergers and acquisitions .................................................................................................................................... 19
11.4 Strategic alliances ............................................................................................................................................... 21
11.5 Comparing acquisitions, alliances and organic development............................................................................. 22
, Chapter 7: Business strategy and models
Business
7.1 Introduction models
- value
Strategic business unit (SBU): supplies goods or configuration
services for a distinct domain of activity. - value creation
- value capture
7.2 Generic competitive strategies
Competitive strategy: concerned with how a
company, business unit of organisation achieves
competitive advantage in its domain of activity (costs,
product & service features, branding). business
Competitive advantage: how a company, business strategy
Generic Interactive
unit or organisation creates value for its users which strategies strategies
is both greater than the costs of supplying them and - cost leadership -
superior to that of rivals. - differentation
hypercompetitive
strategy
- focus - cooperation
An competitive strategy is always vulnerable to - hybrid - game theory
competitors with better products or lower prices.
Porter’s distinction between cost, differentiation and scope →
Generic strategies.
1 2
Cost-leadership strategy: involves becoming the lowest-cost
organisation in a domain of activity. There are 4 key cost drivers:
1. Input costs (labour, raw materials)
2. Economies of scale: spreading high (fixed) costs over high
levels of output. → Economies of scale curve usually U-
shaped.
3. Experience: the cumulative experience gained by an
organisation with each unit of output leads to reductions in
unit costs.
4. Product/process design: by designing a product/service it is
important to recognise whole-life costs.
Two options for cost-leaders:
1. Parity: cost-leader charging same prices as average
competitor, turning cost advantage wholly into extra profit.
2. Proximity: closeness to competitors in terms of features.
Customers may require small cuts in prices to compensate 3a
for slightly lower quality. 3b
Differentiation strategy: involves uniqueness along some
dimension that is sufficiently valued by customers to allow a price
premium. 3 primary differentiation drivers to consider:
1. Product and service attributes: certain product attributes can provide better or unique features than
comparable products/services for the customer.
2. Customer relationships: differentiation can rely on relationship between the organisation providing
the product/service and the customer. (depending on e.g. customer services & responsiveness,
marketing & reputation)
3. Complements: differentiation can also build on linkages to other products/services.
Focus strategy: targets a narrow segment or domain of activity and tailors its products or services to the
needs of that specific segment to the exclusion of others. → Two variants: cost focus strategy &
differentiation focus strategy.
Successful focus strategies depend on at least 3 key factors: (1) distinct segment needs, (2) distinct
segment value chains and (3) viable segment economics.
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