The 18th edition of Crafting and Executing Strategy represents one of our most important and thoroughgoing revisions ever. The newest member of the author team, Margie Peteraf, led a thorough re-examination of every paragraph on every page of the 17th edition chapters. The overriding objectives were to inject new. Known for its cases and teaching notes, CRAFTING AND EXECUTING STRATEGY, 17e provides an unparalleled case line up. (1) 22 of the 26 cases are brand new or extensively updated for this edition, (2) The selection of cases is diverse, timely, and thoughtfully-crafted and complements the text presentation pushing.

Thompson, Strickland and Gambles’, CRAFTING AND EXECUTING STRATEGY, 17e presents the latest research findings from the literature and cutting-edge strategic practices of companies have been incorporated to keep step with both theory and practice. The chapter content continues to be solidly mainstream and balanced, mirroring both the best academic thinking and the pragmatism of real-world strategic management.

Known for its cases and teaching notes, CRAFTING AND EXECUTING STRATEGY, 17e provides an unparalleled case line up. (1) 22 of the 26 cases are brand new or extensively updated for this edition, (2) The selection of cases is diverse, timely, and thoughtfully-crafted and complements the text presentation pushing students to apply the concepts and analytical tools they have read about. (3) Many cases involve high-profile companies. (4) And there’s a comprehensive package of support materials that are a breeze to use, highly effective, and flexible enough to fit most any course design.Sample questions asked in the 17th edition of Crafting & Executing Strategy: The Hero Group is among the 10 largest corporations in India, with 19 business segments and annual revenues of $3.19 billion in fiscal 2005–2006. Many of the corporation’s business units have used strategic alliances with foreign partners to compete in new product and geographic markets.

Review the company’s statements concerning its alliances and international business operations at www.herogroup.com/alliance.htm and prepare a two-page report that outlines the Hero Group’s successful use of international strategic alliances. Go to www.avoncompany.com/investor/ and read the “Management Discussion and Analysis of Financial Condition and Results of Operations” section of Avon’s 2007 annual report. The company provides a great deal of information about its turnaround plan launched in 2005 and its ongoing corrective actions to achieve operating excellence. Describe in one to two pages how management at Avon demonstrates the internal leadership needed for superior strategy execution. Suppose you found yourself in the following situation: In preparing a bid for a multimillion-dollar contract in a foreign country, you are introduced to a “consultant” who offers to help you in submitting the bid and negotiating with the customer company. You learn in conversing with the consultant that she is well connected in local government and business circles and knows key personnel in the customer company extremely well.

The consultant quotes you a six-figure fee. Later, your local coworkers tell you that the use of such consultants is normal in this country—and that a large fraction of the fee will go directly to people working for the customer company. They further inform you that bidders who reject the help of such consultants have lost contracts to competitors who employed them. What would you do, assuming your company’s code of ethics expressly forbids the payments of bribes or kickbacks in any form?

CHAPTER 1 WHAT IS STRATEGY AND WHY IS IT IMPORTANT? Crafting and Executing STRATEGY The Quest for Competitive Advantage • WHAT DO WE MEAN BY STRATEGY?♦ What is our present situation? ● Business environment and industry conditions ● Firm’s financial and competitive capabilities♦ Where do we want to go from here? ● Creating a vision for the firm’s future direction♦ How are we going to get there? ● Crafting actions that will get us there 1–2 • WHAT IS STRATEGY ABOUT?♦ Strategy is all about How: ● How to outcompete rivals.

● How to respond to economic and market conditions and growth opportunities. ● How to manage functional pieces of the business. ● How to improve the firm’s financial and market performance. 1–3 • WHY DO STRATEGY?♦ A firm does strategy: ● To improve its financial performance. Megadeth Anthology Set The World Afire RARE. ● To strengthen its competitive position. ● To gain a sustainable competitive.

Advantage over its market rivals.♦ A creative, distinctive strategy: ● Can yield above-average profits. ● Makes competition difficult for rivals. 1–4 • STRATEGY AND COMPETITORS♦ Strategy is about competing differently from rivals— ● Doing what they don’t do or doing it better! ● Doing what they can’t do! ● Doing that which sets the firm apart and attracts customers. ● Doing what we should or should not do to produce a competitive edge. 1–5 • 1.1 Identifying a Company’s Strategy—What to Look For 1–6 • The Quest for Competitive Advantage♦ Competitive Advantage ● Meeting customer needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost.♦ Sustainable Competitive Advantage ● Giving buyers lasting reasons to prefer a firm’s products or services over those of its competitors.

1–7 • STRATEGIC APPROACH CHOICES Building Competitive AdvantageLow-cost Differentiation Focus on Best-costprovider on features market niche provider 1–8 • STRATEGIC APPROACHES♦ Building a competitive advantage by: 1. Striving to become the industry’s low-cost provider (efficiency).

Outcompeting rivals on differentiating features (effectiveness). Focusing on better serving a niche market’s needs (efficiency andor effectiveness). Offering the lowest (best) prices for differentiated goods (best-cost provider). 1–9 • GAINING SUSTAINABLE COMPETITIVE ADVANTAGE♦ How to create a sustainable competitive advantage: ● Develop valuable expertise and competitive capabilities over the long-term that rivals cannot readily copy, match or best. ● Put the constant quest for sustainable competitive advantage at center stage in crafting your strategy. 1–10 • Why a Firm’s Strategy Evolves over Time♦ Managers modify strategy in response to: ● Changing market conditions ● Advancing technology ● Fresh moves of competitors ● Shifting buyer needs ● Emerging market opportunities ● New ideas for improving the strategy 1–11 • The Evolving Nature of a Firm’s Strategy♦ Realized (current) strategy is a blend of: ● Proactive (deliberate) strategy elements that include both continued and new initiatives. ● Reactive (emergent) strategy elements that are required due to unanticipated competitive developments and fresh market conditions.

1–12 • 1.2 A Company’s Strategy Is a Blend of Proactive Initiatives and Reactive Adjustments 1–13 • THE RELATIONSHIP BETWEEN AFIRM’S STRATEGY AND ITSBUSINESS MODEL Realized Business Strategy $$$? Model Competitive Value Initiatives Proposition Business Profit Formula Approaches 1–14 • A Company’s Business Model♦ How the business will make money: ● By providing customers with value.

 The firm’s customer value proposition ● By generating revenues sufficient to cover costs and produce attractive profits.  The firm’s profit formula It takes a proven business model—one that yields appealing profitability—to demonstrate viability of a firm’s strategy. 1–15 • Business Model Elements♦ The Customer Value Proposition ● Satisfying buyer wants and needs at a price customers will consider a good value.  The greater the value provided (V) and the lower the price (P), the more attractive the value proposition is to customers.

1–16 • Business Model Elements (cont’d)♦ The Profit Formula ● Creating a cost structure that allows for acceptable profits, given that pricing is tied to the customer value proposition.  V—the value provided to customers  P—the price charged to customers  C—the firm’s costs ● The lower the costs (C) for a given customer value proposition (V–P), the greater the ability of the business model to be a moneymaker. 1–17 • IS OUR STRATEGY A WINNER?

The Strategic Fit TestThe Competitive Winning The PerformanceAdvantage Test Test Strategy 1–18 • WHAT MAKES A STRATEGY A WINNER?♦ A winning strategy must pass three tests: ● The Fit Test  Does it exhibit dynamic fit with the external and internal aspects of the firm’s overall situation? ● The Competitive Advantage Test  Can it help the firm achieve a significant and sustainable competitive advantage?

● The Performance Test  Can it produce good performance as measured by the firm’s profitability, financial and competitive strengths, and market standing? 1–19 • WHY CRAFTING AND EXECUTING STRATEGY ARE IMPORTANT TASKS♦ Strategy provides: ● A prescription for doing business. ● A road map to competitive advantage. ● A game plan for pleasing customers. ● A formula for attaining long-term standout marketplace performance.Good Strategy + Good Strategy Execution = Good Management 1–20.