INDUSTRY SEVEN: MANUFACTURING
CASE 3 2 General Electric, GE Capital, and the Financial Crisis of 2008: The Best of the Worst in the Financial Sector? 32-1 (Contributor: Alan N. Hoffman) The financial services industry was, by definition, volatile, and GE Capital was particularly hard hit by the economic recession of 2008. With the credit markets illiquid and financial markets falling, GE Capital found it was overexposed to commercial real estate and foreign residential mortgages. At this point, GE’s parent corporation stepped in, began reorganizing GE Capital, and significantly downsized the unit. GE Capital hoped to see continued sustainable earnings growth with growing margins and lower portfolio risk, and to return money to investors and resume paying dividends to its parent company.
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CASE 3 3 Snap-on Tools: A Victim of Its Own Success 33-1 (Contributor: Alan N. Hoffman) For 93 years, Snap-on Tools had firmly established itself as an innovative premium tool manufacturer serving the automotive industry. In recent years, Snap-on Tools started to expand its product lines to engineering industries including aerospace, aviation, and oil and gas. It also began to give technical education to build the skilled labor base in the US—its largest market that constituted 65% of all revenue. Snap-on feared that its overdependence on the US market could make its business and operations vulnerable to country-specific trends as well as increase the company’s exposure to local factors such as severe weather conditions, labor strikes, or changes in regulations.
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Preface
Welcome to the 15th edition of Strategic Management and Business Policy! All of the chapters have been updated and we have added one new chapter on Global Strategy. In addition, we have added 13 brand-new cases (Target, American Red Cross, Sonic Restaurants, Harley Davidson, Staples, Chipotle, Uber, Pandora Internet Radio, Snap-on Tools, Google, Pepsi, Town Sports International, and JC Penney). Many of the cases are exclusive 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.
The theme that runs throughout all 13 chapters of this edition continues our view from the 14th edition that there are three strategic issues that comprise the corner- stone all organizations must build upon to push their businesses forward. Those are globalization, innovation, and sustainability. Each chapter incorporates specific vignettes about these three themes. We strive to be the most comprehensive and prac- tical strategy book on the market, with chapters ranging from corporate governance and social responsibility to competitive strategy, functional strategy, and strategic alliances.
FEATURES NEW TO THIS 15TH EDITION This edition of the text has:
■■ A completely new Chapter (9) on Global Strategy. While we discuss globalization in every chapter of the book, including a Global Issues section in each chapter, we have called out a stand-alone chapter to address the key issues of entry, inter- national coordination, stages of international development, international employ- ment, and measurement of performance.
■■ New and updated vignettes on sustainability (which is widely defined as business sustainability), globalization (which we view as an expectation of business), and innovation (which is the single most important element in achieving competitive advantage) appear in every chapter of the text.
■■ Every example, chapter opening, and story has been updated. This includes chap- ter opening vignettes examining companies such as: Tesla, Pizza Hut, UNIQLO, Kärcher, Purbani Group, and United Airlines among many others.
■■ Resource-based analysis and more specifically the VRIO framework (Chapter 5) has been added to the toolbox of students’ understanding of core competencies and competitive advantage with a significant addition of material and a practical example.
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■■ Extensive additions have been made to the text from both strategy research and practical experience.
■■ Thirteen new comprehensive cases have been added to support the 14 popular full- length cases and 6 mini-cases carried forward from past editions. Of the 33 cases appearing in this book, 19 are exclusive and do not appear in other books.
■■ One of the new cases deals with privacy (Google and the Right to Be Forgotten). ■■ One of the new cases deals with governance (American Red Cross). ■■ One of the new cases deals with conscious capitalism (Chipotle). ■■ Two of the new cases deal with international issues (Uber, Harley Davidson). ■■ One of the new cases involves Internet companies (Pandora Internet Radio). ■■ One of the new cases deals with Sports and Leisure (Town Sports Int’l). ■■ One of the new cases deals with Apparel (J.C. Penney). ■■ Three of the new cases deal with Food and Beverages (Pepsi, Sonic Restaurants). ■■ Two of the new cases deal with Retailing (Target, Staples). ■■ One of the new cases deals with Manufacturing (Snap-on Tools).