Foundations of Strategy

Robert M. Grant, Judith J. Jordan

• Publisher: Wiley
• Year: 2015
• Print ISBN:
  9781118914700
• eBook ISBN:
  9781119001270
• Edition: 2
• Topic: Business
• Subtopic: Decision Making
• Index: Business

Foundations of Strategy, second edition is a concise text aimed at both undergraduate and Masters students. Written in an accessible style with the needs of these students in mind, the latest edition has a clear, comprehensive approach, underlined by sound theoretical depth. The content has been fully revised and updated to reflect recent developments in the business environment and strategy research.

Features of the text include:

• 10 chapters covering all the topics in a typical one-semester course.
• Concise and integrated treatment of strategy implementation focusing on strategy in practice.
• Integration of the not-for-profit sector.
• Opening and closing chapter case studies covering a range of real-world, global examples.
• Featured Example and Case Insight boxes throughout chapters to give an additional dimension to the subject matter.

An extensive range of learning and teaching materials accompany this text including instructor manual, case teaching notes, test bank and PowerPoint slides, for instructors. Resources for students include self-test quizzes and glossary flashcards to check understanding.

1
The concept of strategy

Introduction and objectives

Opening Case: Strategy and success: Lady Gaga and Jeff Bezos

The role of strategy in success

A brief history of strategy

Origins

The evolution of business strategy

Strategy today

What is strategy?

How do we describe a firm’s strategy?

How do we identify a firm’s strategy?

How is strategy made? Design versus emergence

What roles does strategy perform?

Strategy: In whose interest? Shareholders versus stakeholders

Strategy: Whose interests should be prioritized?

Profit and purpose

The debate over corporate social responsibility

Strategic management of not-for-profit organizations

The approach taken in this book

Summary

Further reading

Self-study questions

Closing Case: Tough Mudder LLC: Turning mud runs into a global business

Notes

Introduction and objectives

Strategy is about success. This chapter explains what strategy is and why it is important to individuals and organizations in achieving their goals. We will distinguish strategy from planning. Strategy is not a detailed plan or programme of instructions; it is a unifying theme that gives coherence and direction to the actions and decisions of an individual or an organization.

The principal task of this chapter is to introduce the notion of strategy, to make you aware of some of the key debates in strategy and to present the basic framework for strategy analysis that underlies this book.

By the time you have completed this chapter, you will:

• appreciate the contribution that strategy can make to successful performance, both for individuals and for organizations;
• be aware of the origins of strategy and how views on strategy have changed over time;
• be familiar with some of the key questions and terminology in strategy;
• understand the debates that surround corporate values and social responsibility;
• gain familiarity with the challenges of strategy making in not-for-profit organizations;
• comprehend the basic approach to strategy that underlies this book.

Since the purpose of strategy is to help us to understand success, we start by looking at the role that strategy has played in enabling individuals to achieve their goals. Our Opening Case provides a brief outline of two different success stories: Lady Gaga’s attainment of celebrity status and Jeff Bezos’s building of Amazon. These two individuals working in very different fields offer fascinating insights into the foundations of success and the nature of strategy.

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Opening Case
Strategy and success: Lady Gaga and Jeff Bezos

Lady Gaga

Stefani Joanne Angelina Germanotta, better known as Lady Gaga, is the most successful popular entertainer to emerge in the 21st century. Her three albums, The Fame, released August 2008, Born This Way, released May 2011, and Artpop, released November 2013, sold a total of 26 million copies by the end of 2013. Her Monster Ball completed a 2009 concert world tour that grossed $227.4 million (the highest for any debut artist). She has earned five Grammy music awards and 13 MTV video music awards and places on Forbes’ listings of The World’s 100 Most Powerful Women (though some way behind German Chancellor Angela Merkel).

Since dropping out of NYU’s Tisch School of the Arts in 2005, she has shown total commitment to advancing her career as an entertainer and developing her Lady Gaga persona. Gaga’s music is an appealing pastiche of Seventies glam, Eighties disco and Nineties Europop. One music critic, Simon Reynolds, described it as, ‘ruthlessly catchy, noughties pop glazed with Auto-Tune and undergirded with R&B-ish beats’.¹ Her songs embody themes of stardom, love, religion, money, identity, liberation, sexuality and individualism.

However, music is only one element in the Lady Gaga phenomenon – her achievement is based less upon her abilities as a singer or songwriter and more upon her establishing a persona which transcends pop music. Like David Bowie and Madonna before her, Lady Gaga is famous for being Lady Gaga. The Gaga persona comprises a multimedia, multifaceted offering built from an integrated array of components that include her music, her stunning visual appearance, newsworthy events, distinctive social attitudes, her personality and a set of clearly communicated values. Key among these is visual impact and theatricality. Lady Gaga’s outfits have set new standards in eccentricity and innovation. Her dresses – including her plastic bubble dress, meat dress and ‘decapitated-corpse dress’ – together with weird hairdos, extravagant hats and extreme footwear (she met President Obama in 16-inch heels) – are as well-known as her hit songs, and her music is promoted through visually stunning videos that combine fantasy, sex, sadism and science fiction. The variety of visual images she projects is such that her every appearance creates a buzz of anticipation as to her latest incarnation.

Lady Gaga has established a business model that recognizes the realities of the post-digital world of entertainment. Like Web 2.0 pioneers such as Facebook and Twitter, Gaga has followed the dictum ‘first build market presence then monetize that presence’. She builds market presence through a range of online channels: her website, YouTube, Facebook and Twitter. With 2.8 billion YouTube views, 64 million Facebook fans and 41 million Twitter followers, she is outranked in online presence only by Justin Bieber and Katy Perry. Her emphasis on visual imagery reflects the ways in which her fame is converted into revenue. Music royalties are dwarfed by her concert earnings. Her other revenue sources – merchandizing deals, endorsements and product placements – are also linked to her market presence.

A distinctive feature of Gaga’s market development is the emphasis she places on building relations with her fans. The devotion of her fans – her ‘Little Monsters’ – is based less on their desire to emulate her look as upon empathy with her values and attitudes. They recognize Gaga’s images more as social statements of non-conformity than as fashion statements. In communicating her experiences of alienation and bullying at school and her values of individuality, sexual freedom and acceptance of differences – reinforced through her involvement in charities and gay rights events – she has built a global fan base that is unusual in its loyalty and commitment. As ‘Mother Monster’, Gaga is spokesperson and guru for this community, which is reinforced ...

Table of contents

• Cover
• Title page
• Copyright page
• Preface to 2nd edition
• Preface to 1st edition
• Online teaching and learning resources
• Case List
• 1: The concept of strategy
• 2: Industry analysis
• 3: Resources and capabilities
• 4: The nature and sources of competitive advantage
• 5: Industry evolution and strategic change
• 6: Technology-based industries and the management of innovation
• 7: Corporate strategy
• 8: Global strategies and the multinational corporation
• 9: Realizing strategy
• 10: Current trends in strategic management
• Glossary
• Index
• End User License Agreement