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Assignment 1500 word for 3Q Kingdom of Saudi Arabia Ministry of Education Saudi Electronic University المملكة العربية السعودية وزارة التعليم الجامعة السعودية الإلكترونية College of Administrative and Financial Sciences Assignment 1 Strategic Management (MGT 401) Deadline: 23/10/2021 @ 23:59 Course Name: Strategic Management Student’s Name: Course Code: MGT401 Student’s ID Number: Semester: First CRN: 15181 Academic Year:2021-22 For Instructor’s Use only Instructor’s Name: Dr. Salem Alanizan Students’ Grade: Marks Obtained/Out of 5 Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY · The Assignment must be submitted on Blackboard (WORD format only) via 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 question number clearly in their answer. · Late submission 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 answered 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. Assignment No 1: Discussion Questions Learning Outcomes: 1. Understand the basic concepts and terminology used in Strategic Management. (Lo 1) 2. Understand the Corporation Social Responsibility (Lo 2). 3. Explain how executive leadership is an important part of strategic management (Lo 3) · Question 1 Discuss the influence of globalization, social responsibility and environmental sustainability on strategic management of a corporation. ( 2 Marks) · Question 2 In what ways can a corporation’s structure and culture be internal strengths or weaknesses? (1Mark) · Question 3 Discuss how executive leadership is an important part of a strategic management? Give examples from real market. (2 Marks) Notes:   · Using the terminology developed in the course of strategic Management will be highly valued. · Your answers MUST include at least 4 outside references (other than the slides and textbook) using a proper referencing style (APA). · Using references from SDL will be highly valued. Good Luck Answers Maximum number of words: 1500 This is a special edition of an established title widely used by colleges and universities throughout the world. Pearson published this exclusive edition for the benefit of students outside the United States and Canada. If you purchased this book within the United States or Canada you should be aware that it has been imported without the approval of the Publisher or Author. Pearson Global Edition GlobAl edITIon GlobAl edITIon For these Global editions, the editorial team at Pearson has collaborated with educators across the world to address a wide range of subjects and requirements, equipping students with the best possible learning tools. This Global edition preserves the cutting-edge approach and pedagogy of the original, but also features alterations, customization and adaptation from the north American version. Strategic Management and business Policy Globalization, Innovation, and Sustainability FoURTeenTH edITIon Thomas L. Wheelen • J. David Hunger Alan N. Hoffman • Charles E. Bamford W heelen H unger H o ffm an b am fo rd Fo U R T e e n T H e d IT Io n Strategic M anagem ent and b usiness Po licy G lobalization, Innovation, and Sustainability G lo b A l ed IT Io n # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 1 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services FOURTEENTH EDITION Strategic Management and Business Policy GLOBALIZATION, INNOVATION, AND SUSTAINABILITY A01_WHEE0811_14_GE_FM.indd 1 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 2 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services A01_WHEE0811_14_GE_FM.indd 2 5/20/14 12:26 PM This page is intentionally left blank. # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 3 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Thomas L. Wheelen Formerly with University of Virginia, Trinity College, Dublin, Ireland J. David Hunger Iowa State University, St. John’s University Strategic Management and Business Policy GLOBALIZATION, INNOVATION, AND SUSTAINABILITY Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo FOURTEENTH EDITION Alan N. Hoffman Bentley University Charles E. Bamford University of Notre Dame GlObal EDITION A01_WHEE0811_14_GE_FM.indd 3 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 4 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Editor in Chief: Stephanie Wall Acquisitions Editor: Daniel Tylman Acquisitions Editor, Global Editions: Debapriya Mukherjee Project Editor, Global Editions: Suchismita Ukil Program Management Lead: Ashley Santora Program Manager: Sarah Holle Editorial Assistant: Bernard Ollila Director of Marketing: Maggie Moylan Marketing Manager: Erin Gardner Marketing Assistant: Gianni Sandri Project Management Lead: Judy Leale Project Manager: Karalyn Holland Head of Learning Asset Acquisition, Global Editions: Laura Dent Media Producer, Global Editions: M. Vikram Kumar Senior Manufacturing Controller, Production, Global Editions: Trudy Kimber Procurement Specialist: Michelle Klein Creative Director: Blair Brown Central Design Manager: Jayne Conte Cover Design: PreMedia Global Cover Image: © majeczka/Shutterstock VP, Director of Digital Strategy & Assessment: Paul Gentile Digital Editor: Brian Surette Digital Development Manager: Robin Lazrus MyLab Project Manager: Joan Waxman Digital Project Manager: Alana Coles Media Project Manager: Lisa Rinaldi Full-Service Project Management: S4Carlisle Publishing Services Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text. Additional photo/image credits: Sustainability issue, LehaKok/Shutterstock; Innovation issue, ssuaphotos/Shutterstock; Global issue, Rob Wilson/Shutterstock; Strategy highlight, Triff/Shutterstock; Chapter opener globe, Nelson Marques/Shutterstock. Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsonglobaleditions.com © Pearson Education Limited 2015 The rights of Thomas L. Wheelen, J. David Hunger, Alan N. Hoffman, and Charles E. Bamford to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Authorized adaptation from the United States edition, entitled Strategic Management and Business Policy, 14th edition, ISBN 978-0-13-312614-3, by Thomas L. Wheelen, J. David Hunger, Alan N. Hoffman, and Charles E. Bamford, published by Pearson Education © 2015. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. ISBN 10: 1-292-06081-6 ISBN 13: 978-1-292-06081-1 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library 10 9 8 7 6 5 4 3 2 1 14 13 12 11 Typeset in 10/12 Times LT Std by S4Carlisle Publishing Services Printed and bound by Courier Kendallville in The United States of America A01_WHEE0811_14_GE_FM.indd 4 5/20/14 12:26 PM ISBN 13: 978-1-292-06 -794 0 (Print) (PDF) # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 5 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Brief Contents PART ONE Introduction to Strategic Management and Business Policy 35 C H A P T E R 1 Basic Concepts of Strategic Management 36 C H A P T E R 2 Corporate Governance 74 C H A P T E R 3 Social Responsibility and Ethics in Strategic Management 102 PART TWO Scanning the Environment 123 C H A P T E R 4 Environmental Scanning and Industry Analysis 124 C H A P T E R 5 Internal Scanning: Organizational Analysis 160 PART THREE Strategy Formulation 195 C H A P T E R 6 Strategy Formulation: Situation Analysis and Business Strategy 196 C H A P T E R 7 Strategy Formulation: Corporate Strategy 218 C H A P T E R 8 Strategy Formulation: Functional Strategy and Strategic Choice 248 PART fOUR Strategy Implementation and Control 277 C H A P T E R 9 Strategy Implementation: Organizing for Action 278 C H A P T E R 1 0 Strategy Implementation: Staffing and Directing 308 C H A P T E R 1 1 Evaluation and Control 336 PART fIVE Introduction to Case Analysis 365 C H A P T E R 1 2 Suggestions for Case Analysis 366 PART SIx Cases in Strategic Management 393 GLOSSARY 803 NAmE INDEx 815 SUBJECT INDEx 820 5 A01_WHEE0811_14_GE_FM.indd 5 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 6 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services A01_WHEE0811_14_GE_FM.indd 6 5/20/14 12:26 PM This page is intentionally left blank. # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 7 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Contents Preface 23 About the Authors 31 PART ONE Introduction to Strategic Management and Business Policy 35 C H A P T E R 1 Basic Concepts of Strategic Management 36 The Study of Strategic Management 38 Phases of Strategic Management 38 Benefits of Strategic Management 39 Globalization, Innovation, and Sustainability: Challenges to Strategic Management 41 Impact of Globalization 42 Impact of Innovation 43 Global Issue: REGIONAL TRADE ASSOCIATIONS REPLACE NATIONAL TRADE BARRIERS 43 Impact of Sustainability 44 Theories of Organizational Adaptation 45 Creating a Learning Organization 46 Basic Model of Strategic Management 47 Environmental Scanning 48 Strategy Formulation 50 Strategy Implementation 53 Evaluation and Control 55 Feedback/Learning Process 55 Initiation of Strategy: Triggering Events 56 Strategic Decision Making 57 What Makes a Decision Strategic 57 Mintzberg’s Modes of Strategic Decision Making 58 Strategic Decision-Making Process: Aid to Better Decisions 59 The Strategic Audit: Aid to Strategic Decision Making 60 End of Chapter Summary 61 APPENDIx 1.A Strategic Audit of a Corporation 66 7 A01_WHEE0811_14_GE_FM.indd 7 5/20/14 12:26 PM 8 C O N T E N T S # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 8 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services C H A P T E R 2 Corporate Governance 74 Role of the Board of Directors 77 Responsibilities of the Board 78 Members of a Board of Directors 80 Innovation Issue: JCPENNEY AND INNOVATION 81 Strategy Highlight: AGENCY THEORY VERSUS STEWARDSHIP THEORY IN CORPORATE GOVERNANCE 83 Nomination and Election of Board Members 86 Organization of the Board 87 Impact of the Sarbanes–Oxley Act on U.S. Corporate Governance 88 Global Issue: GLOBAL BUSINESS BOARD ACTIVISm AT YAHOO! 90 Trends in Corporate Governance 91 The Role of Top Management 92 Responsibilities of Top Management 92 Sustainability Issue: CEO PAY AND CORPORATE PERfORmANCE 93 End of Chapter Summary 96 C H A P T E R 3 Social Responsibility and Ethics in Strategic Management 102 Social Responsibilities of Strategic Decision Makers 104 Responsibilities of a Business Firm 104 Sustainability 107 Corporate Stakeholders 108 Sustainability Issue: mARKS & SPENCER LEADS THE WAY 108 Strategy Highlight: JOHNSON & JOHNSON CREDO 111 Ethical Decision Making 111 Some Reasons for Unethical Behavior 112 Global Issue: HOW RULE-BASED AND RELATIONSHIP-BASED GOVERNANCE SYSTEmS AffECT ETHICAL BEHAVIOR 113 Innovation Issue: TURNING A NEED INTO A BUSINESS TO SOLVE THE NEED 115 Encouraging Ethical Behavior 116 End of Chapter Summary 118 PART TWO Scanning the Environment 123 C H A P T E R 4 Environmental Scanning and Industry Analysis 124 Environmental Scanning 126 Identifying External Environmental Variables 126 A01_WHEE0811_14_GE_FM.indd 8 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 9 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Sustainability Issue: GREEN SUPERCARS 128 Global Issue: SUVs POWER ON IN CHINA 136 Identifying External Strategic Factors 137 Industry Analysis: Analyzing the Task Environment 138 Porter’s Approach to Industry Analysis 138 Industry Evolution 142 Innovation Issue: TAKING STOCK Of AN OBSESSION 143 Categorizing International Industries 143 International Risk Assessment 144 Strategic Groups 144 Strategic Types 146 Hypercompetition 146 Using Key Success Factors to Create an Industry Matrix 147 Competitive Intelligence 148 Sources of Competitive Intelligence 149 Strategy Highlight: EVALUATING COmPETITIVE INTELLIGENCE 150 Monitoring Competitors for Strategic Planning 151 Forecasting 152 Danger of Assumptions 152 Useful Forecasting Techniques 152 The Strategic Audit: A Checklist for Environmental Scanning 154 Synthesis of External Factors—EFAS 154 End of Chapter Summary 156 C H A P T E R 5 Internal Scanning: Organizational Analysis 160 A Resource-Based Approach to Organizational Analysis 162 Core and Distinctive Competencies 162 Using Resources to Gain Competitive Advantage 163 Determining the Sustainability of an Advantage 164 Business Models 166 Value-Chain Analysis 167 Industry Value-Chain Analysis 168 Corporate Value-Chain Analysis 169 Scanning Functional Resources and Capabilities 170 Basic Organizational Structures 171 Corporate Culture: The Company Way 172 C O N T E N T S 9 A01_WHEE0811_14_GE_FM.indd 9 5/20/14 12:26 PM 10 C O N T E N T S # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 10 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Global Issue: mANAGING CORPORATE CULTURE fOR GLOBAL COmPETITIVE ADVANTAGE: ABB VS. PANASONIC 174 Strategic Marketing Issues 174 Innovation Issue: DOCOmO mOVES AGAINST THE GRAIN 176 Strategic Financial Issues 177 Strategic Research and Development (R&D) Issues 178 Strategic Operations Issues 180 Strategic Human Resource (HRM) Issues 181 Sustainability Issue: THE OLYmPIC GAmES—SOCHI 2014 AND RIO 2016 184 Strategic Information Systems/Technology Issues 185 The Strategic Audit: A Checklist for Organizational Analysis 187 Synthesis of Internal Factors 187 End of Chapter Summary 189 PART THREE Strategy Formulation 195 C H A P T E R 6 Strategy Formulation: Situation Analysis and Business Strategy 196 Situational Analysis: SWOT Approach 198 Generating a Strategic Factors Analysis Summary (SFAS) Matrix 198 Finding a Propitious Niche 199 Review of Mission and Objectives 202 Business Strategies 203 Porter’s Competitive Strategies 203 Global Issue: THE NIKE SHOE STRATEGY VS. THE NEW BALANCE SHOE STRATEGY 205 Innovation Issue: CHEGG AND COLLEGE TExTBOOKS 208 Cooperative Strategies 209 Sustainability Issue: STRATEGIC SUSTAINABILITY—ESPN 210 End of Chapter Summary 214 C H A P T E R 7 Strategy Formulation: Corporate Strategy 218 Corporate Strategy 220 Directional Strategy 220 Growth Strategies 221 Strategy Highlight: TRANSACTION COST ECONOmICS ANALYZES VERTICAL GROWTH STRATEGY 225 International Entry Options for Horizontal Growth 226 Global Issue: GLOBAL ExPANSION IS NOT ALWAYS A PATH TO ExPANSION 226 Controversies in Directional Growth Strategies 230 A01_WHEE0811_14_GE_FM.indd 10 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 11 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services Stability Strategies 231 Retrenchment Strategies 232 Portfolio Analysis 234 BCG Growth-Share Matrix 234 Sustainability Issue: GENERAL mOTORS AND THE ELECTRIC CAR 236 Advantages and Limitations of Portfolio Analysis 237 Managing a Strategic Alliance Portfolio 238 Corporate Parenting 239 Innovation Issue: TO RED HAT OR NOT? 239 Developing a Corporate Parenting Strategy 240 Horizontal Strategy and Multipoint Competition 241 End of Chapter Summary 241 C H A P T E R 8 Strategy Formulation: Functional Strategy and Strategic Choice 248 Functional Strategy 250 Marketing Strategy 250 Financial Strategy 251 Research and Development (R&D) Strategy 253 Operations Strategy 254 Global Issue: WHY DOESN’T STARBUCKS WANT TO ExPAND TO ITALY? 255 Purchasing Strategy 256 Sustainability Issue: HOW HOT IS HOT? 257 Logistics Strategy 258 Innovation Issue: WHEN AN INNOVATION fAILS TO LIVE UP TO ExPECTATIONS 258 Human Resource Management (HRM) Strategy 259 Information Technology Strategy 259 The Sourcing Decision: Location of Functions 260 Strategies to Avoid 263 Strategic Choice: Selecting the Best Strategy 263 Constructing Corporate Scenarios 264 The Process of Strategic Choice 269 Developing Policies 270 End of Chapter Summary 271 PART fOUR Strategy Implementation and Control 277 C H A P T E R 9 Strategy Implementation: Organizing for Action 278 Strategy Implementation 280 Who Implements Strategy? 281 C O N T E N T S 11 A01_WHEE0811_14_GE_FM.indd 11 5/20/14 12:26 PM 12 C O N T E N T S # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 12 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services What Must Be Done? 282 Developing Programs, Budgets, and Procedures 282 Sustainability Issue: A BETTER BOTTLE—ECOLOGIC BRANDS 283 Achieving Synergy 286 How Is Strategy to Be Implemented? Organizing for Action 287 Structure Follows Strategy 287 Stages of Corporate Development 288 Innovation Issues: THE P&G INNOVATION mACHINE STUmBLES 289 Organizational Life Cycle 292 Advanced Types of Organizational Structures 294 Reengineering and Strategy Implementation 297 Six Sigma 298 Designing Jobs to Implement Strategy 299 International Issues in Strategy Implementation 300 International Strategic Alliances 300 Stages of International Development 301 Global Issue: OUTSOURCING COmES fULL CIRCLE 302 Centralization Versus Decentralization 302 End of Chapter Summary 304 C H A P T E R 1 0 Strategy Implementation: Staffing and Directing 308 Staffing 310 Staffing Follows Strategy 311 Selection and Management Development 313 Innovation Issue: HOW TO KEEP APPLE “COOL” 313 Problems in Retrenchment 315 International Issues in Staffing 317 Leading 319 Sustainability Issue: PANERA AND THE “PANERA CARES COmmUNITY CAfÉ” 319 Managing Corporate Culture 320 Action Planning 324 Management by Objectives 326 Total Quality Management 326 International Considerations in Leading 327 Global Issue: CULTURAL DIffERENCES CREATE ImPLEmENTATION PROBLEmS IN mERGER 329 End of Chapter Summary 330 A01_WHEE0811_14_GE_FM.indd 12 5/20/14 12:26 PM C O N T E N T S 13 # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 13 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services C H A P T E R 1 1 Evaluation and Control 336 Evaluation and Control in Strategic Management 338 Measuring Performance 338 Appropriate Measures 338 Types of Controls 339 Innovation Issue: REUSE Of ELECTRIC VEHICLE BATTERIES 340 Activity-Based Costing 341 Enterprise Risk Management 342 Primary Measures of Corporate Performance 342 Balanced Scorecard Approach: Using Key Performance Measures 345 Sustainability Issue: E-RECEIPTS 345 Primary Measures of Divisional and Functional Performance 347 Responsibility Centers 348 Using Benchmarking to Evaluate Performance 349 International Measurement Issues 350 Global Issue: COUNTERfEIT GOODS AND PIRATED SOfTWARE: A GLOBAL PROBLEm 352 Strategic Information Systems 352 Enterprise Resource Planning (ERP) 353 Radio Frequency Identification (RFID) 353 Divisional and Functional is Support 354 Problems in Measuring Performance 354 Short-Term Orientation 354 Goal Displacement 356 Guidelines for Proper Control 357 Strategic Incentive Management 357 End of Chapter Summary 359 PART fIVE Introduction to Case Analysis 365 C H A P T E R 1 2 Suggestions for Case Analysis 366 The Case Method 368 Researching the Case Situation 368 Financial Analysis: A Place to Begin 369 Analyzing Financial Statements 369 Common-Size Statements 373 Z-Value and the Index of Sustainable Growth 373 Useful Economic Measures 374 Format for Case Analysis: The Strategic Audit 375 A01_WHEE0811_14_GE_FM.indd 13 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 14 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services 14 C O N T E N T S End of Chapter Summary 377 APPENDIx 12.A Resources for Case Research 379 APPENDIx 12.B Suggested Case Analysis Methodology Using the Strategic Audit 381 APPENDIx 12.C Example of Student-Written Strategic Audit 384 PART SIx Cases in Strategic Management 393 S E C T I O N A Corporate Governance: Executive Leadership CASE 1 The Recalcitrant Director at Byte Products, Inc.: Corporate Legality versus Corporate Responsibility 399 (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 405 (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? S E C T I O N B Business Ethics CASE 3 Everyone Does It 415 (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. CASE 4 The Audit 419 (Contributors: Gamewell D. Gantt, George A. Johnson, and John A. Kilpatrick) 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. S E C T I O N C Corporate Social Responsibility CASE 5 Early Warning or False Sense of Security? Concussion Risk and the Case of the Impact-Sensing Football Chinstrap 421 (Contributors: Clifton D. Petty, and Michael R. Shirley) In 2009, Battle Sports Science, headquartered in Omaha, Nebraska, was built with a focus on “enhancing safety for athletes.” Specifically, the company wanted to protect young athletes who might have suffered a concussion. Battle Sports Science attempted to gain market attention for its US$149.99 impact indicator (chin strap) through endorsements, and had enlisted a number of NFL players. The company hoped to sell the device to sports programs (schools) as well as to individual players. new A01_WHEE0811_14_GE_FM.indd 14 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 15 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services C O N T E N T S 15 S E C T I O N D International Issues in Strategic management CASE 6 A123 Systems: A New Lithium-Ion Battery System for Electric and Hybrid Cars 425 (Contributor: Alan N. Hoffman) In 2007, A123 was developing its hybrid electric vehicle business. A123 entered into a partnership with Cobasys to introduce lithium-ion batteries into the automotive market. A123 also entered into an agreement with GM to use their batteries in the Saturn Vue Plug-in Hybrid development program and to co-develop a lithium-ion battery for the Chevrolet Volt. A123 faced cash flow shortages after its 2009 IPO and its ultimate survival was threatened by its diminishing funds for continued operations. CASE 7 Guajilote Cooperativo Forestal, Honduras 441 (Contributors: Nathan Nebbe and J. David Hunger) 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. S E C T I O N E General Issues in Strategic management I N D U S T R Y O N E : INTERNET COmPANIES CASE 8 Google Inc. (2010): The Future of the Internet Search Engine 447 (Contributor: Patricia A. Ryan) 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 9 Amazon.com, Inc.: Retailing Giant to High-Tech Player? 461 (Contributor: Alan N. Hoffman) In 2012, more than half of all Amazon sales came from computers, mobile devices including the Kindle, Kindle Fire, and Kindle Touch, and other electronics, as well as general merchandise from home and garden supplies to groceries, apparel, jewelry, health and beauty products, sports and outdoor equipment, tools, and auto and industrial supplies. Amazon was at a crossroads with regard to its push into technology versus its general merchandise. Amazon also faced other challenges, including those from state governments that wanted it to collect sales taxes so it would not adversely compete against local businesses. CASE 10 Blue Nile, Inc.: “Stuck in the Middle” of the Diamond Engagement Ring Market 473 (Contributor: Alan N. Hoffman) Blue Nile Inc. has developed into the largest online retailer of diamond engagement rings. Unlike traditional jewelry retailers, Blue Nile operates completely store-front-free, without in-person consultation services. The business conducts all sales online or by phone, and sales include both engagement (70%) and non-engagement (30%) categories. Blue Nile’s vision is to educate its customer base so customers can make an informed, confident decision no matter what event they are celebrating. It wants to make the entire diamond-buying process easy and hassle-free. new new new A01_WHEE0811_14_GE_FM.indd 15 5/20/14 12:26 PM # 111708 Cust: PE/NJ/B&E Au: Wheelen Pg. No. 16 Title: Strategic Management and Business Policy Server: Jobs4 C/M/Y/K Short / Normal DESIGN SERVICES OF S4carliSle Publishing Services 16 C O N T E N T S I N D U S T R Y T W O : ENTERTAINmENT AND LEISURE CASE 11 Groupon Inc.: Daily Deal or Lasting Success? 489 (Contributors: Nick Falcone, Eric Halbruner, Ellie A. Fogarty, and Joyce Vincelette) Groupon began as a local Chicago discount service and became a global phenomenon seemingly overnight. It was a great idea. The company was the first of its kind and changed the way consumers spend, shop, and think about discounts. But how could Groupon, based on such innovation and having experienced such exceptional growth, be in such a precarious position? A wave of competition had swelled, including the likes of technology giants and both general and niche daily deals services, all replicating Groupon’s business model. How could Groupon compete against large companies and their expansive resources? CASE 12 Netflix Inc.: The 2011 Rebranding/Price Increase Debacle 509 (Contributor: Alan N. Hoffman) On September 18, 2011, Netflix CEO and co-founder Reed Hastings announced on the Netflix blog that the company was splitting its DVD delivery service from its online streaming service, rebranding its DVD delivery service Qwikster, as a way to differentiate it from its online streaming service, and creating a new Web site for it. Three weeks later, in response to customer outrage and confusion, Hastings rescinded the decision to rebrand the DVD delivery service Qwikster and reintegrated it into Netflix. Nevertheless, only five weeks after the initial split, Netflix acknowledged that it had lost 800,000 U.S. subscribers and expected to lose many more, thanks both to the Qwikster debacle and the price hike the company had decided was necessary to cover increasing content costs. CASE 13 Carnival Corporation & plc (2010) 521 (Contributors: Michael J. Keeffe, John K. Ross III, Sherry K. Ross, Bill J. Middlebrook, and Thomas L. Wheelen) 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? CASE 14 Zynga, Inc. (2011): Whose Turn Is It? 541 (Contributors: Zachary Burkhalter, Daniel Zuller, Concetta Bagnato, Joyce Vincelette, and Ellie A. Fogarty) Zynga built its company around social gaming. This new type of gaming transformed the gaming industry on multiple levels and across various platforms. Zynga originally built its games using the Facebook …