Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
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Having a well-crafted social media presence is now an important component of
attracting and retaining students and faculty at academic institutions. Schools can be
Section 6.1 Key Concepts:
What Is an Effective Strategy?
● Strategic positioning attempts to achieve sustainable competitive advantage by
preserving what is distinctive about a company.
● Three key principles underlie strategic positioning:
o Strategy is the creation of a unique and valuable position by:
o Strategy requires trade-offs in competing.
▪ A company has to choose not only what strategy to follow but what
strategy not to follow.
o Strategy involves creating a “fit” among activities.
Levels of Strategy (Figure 6.1)
• Corporate level
o Focuses on the organization as a whole.
• Business level
o Focuses on individual business units or product/service lines.
• Functional level
o Applies to the key functional departments or units within the business units.
Interactive Classroom Material:
EXAMPLE: Evernote and Groove HQ Get Started with Strategic Planning
The Example describes how two small companies, Evernote (325 employees) and Groove HQ
(50 telecommuting employees) saw a need to try strategic planning. The focus of Evernote was
to identify its appropriate strategic position, away from broad needs, many customers to few
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
needs, many customers. Groove HQ was focused on trying to do some basic corporate and
business-level strategic planning emphasizing revising its long-term goals, finding new
customers, and accelerating growth.
Click for follow-up activity.
6.2 The Strategic-Management Process
POWERPOINT SLIDES:
#7 The Strategic-Management Process
#8 Step 1: Establishing the Mission Statement
#9 Step 1: Establishing the Vision Statement
#10 Step 1: Establishing the Values Statement
#11 Step 2: Assess the Current Reality
Section 6.2 discusses the strategic-management process. This process has five-steps: (1) establish
the mission and the vision; (2) assess the current reality; (3) formulate corporate, business, and
functional strategies; (4) execute the strategy; and (5) maintain strategic control. All the steps
may be affected by feedback that enables the taking of corrective action.
Topics and Tips for Discussion:
1. Describe the five steps of the strategic-management process.
You could further elaborate on the strategic-management process at Macy’s. The process
begins with establishing the firm’s mission and vision. As noted in the chapter, one of the
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
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McGraw-Hill Education.
implement the strategy. The results of the 2018 holiday period will provide insights into
how well Macy’s strategy was implemented. One challenge that Macy’s may have
experienced in implementing the strategy was the difficulty of attracting sufficient
seasonal employees during a period of very low unemployment. Finally, the firm must
maintain strategic control. Macy’s will need to engage its people, keep its planning
simple, stay focused on the important things and keep moving toward its goals.
2. Which step of the strategic-management process do you believe is the most important?
Defend your position.
Student responses will vary because each step is interdependent on the others. Some may
place more emphasis on the mission and vision of the firm because the firm will need to
3. Discuss why it is hard for managers to accurately assess their firms’ current reality?
As will be discussed in Chapter 7, there are a variety of decision-making biases that can
make it difficult for managers to objectively assess their firm’s competitive position and
Section 6.2 Key Concepts:
The Strategic-Management Process
● Step 1: Establish the Mission, Vision & Values Statements
o The mission statement expresses the organization’s purpose or reason for being.
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Grand Design
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● Step 2: Assess the Current Reality
● Step 3: Formulate Corporate, Business, and Functional Strategies
● Step 4: Execute the Strategy
o Putting strategic plans into effect is strategy implementation.
● Step 5: Maintain Strategic Control: The Feedback Loop
o Strategic control consists of monitoring the execution of strategy and making
Connect® Exercise
CLICK AND DRAG: The Strategic Management Process
Summary of Activity:
Group Exercise: Strategizing for Real
Exercise Objectives
1. To help you understand the complexity of the strategic-planning process.
6-14
2. To more completely familiarize yourself with strategic planning.
Click for follow-up activity.
SELF-ASSESSMENT 6.1
Assessing Strategic Thinking
Click for Self-Assessment Activity.
6.3 Assessing the Current Reality
POWERPOINT SLIDES:
#12 and 13 SWOT Analysis
#14 Example: SWOT Characteristics of a College Campus
#16 Using VRIO to Assess Competitive Potential
#17 Forecasting: Predicting the Future
#18 Benchmarking: Comparing with the Best
Section 6.3 discusses assessing the current reality in order to develop a grand strategy. This
includes gathering data and making projections by using the tools of SWOT analysis, VRIO
analysis, forecasting and benchmarking.
One way that you could begin your coverage of these topics is to have the students watch the
CBS video “Digital Attraction.” This nearly 4-minute video profiles how retailers are using in-
Topics and Tips for Discussion:
1. Perform a SWOT analysis on your current company or one for which you would like to
work after graduation.
ONLINE
VIDEO
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
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One way that you could help your students conduct a SWOT analysis is to teach them
2. Discuss how you could gather competitive intelligence to allow a company to compete
more effectively. Describe any ethical considerations for competitive intelligence.
There are many tactics for gathering competitive intelligence. One strategy is to stay
3. Identify benchmark performance metrics that your academic institution could use in
comparing its performance to other colleges or universities that could reasonably be
considered competitive rivals of your school.
Schools use a variety of performance metrics for benchmarking. Common metrics include
information on enrollments, graduation rates, completion rates for specific academic
Section 6.3 Key Concepts:
Sustainable competitive advantage exists when other companies cannot duplicate the value
delivered to customers
SWOT Analysis (Figure 6.3)
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● SWOT analysis—also known as a situational analysis—which is a search for the
Strengths, Weaknesses, Opportunities, and Threats affecting the organization.
● The SWOT analysis is divided into two parts: inside matters (i.e., internal strengths and
weaknesses) and outside matters (i.e., external opportunities and threats).
o Organizational strengths are the skills and capabilities that give the organization
special competencies and competitive advantages in executing strategies in
pursuit of its vision.
Connect® Exercise
CLICK AND DRAG: SWOT Analysis
Summary of Activity:
A useful tool in gathering information about the competitive environment to establish a grand
strategy is the SWOT analysis. In this Click and Drag exercise, students will match the provided
term or phrase with the appropriate area of the SWOT analysis.
Interactive Classroom Material:
EXAMPLE: How Would You Analyze Toyota?
This Example presents a sample SWOT analysis for Toyota—its Strengths, Weaknesses,
Opportunities, and Threats.
Click for follow-up activity.
Using VRIO to Assess Competitive Potential (Figure 6.4)
• VRIO is a framework for analyzing a resource or capability to determine its competitive
strategic potential by answering four questions about its value, rarity, imitability, and
organization.
o Value: Is the resource or capability valuable?
o Rarity: Is the resource or capability currently controlled by only a few firms or no
other firms?
o Imitability: Is the resource or capability costly for other firms to imitate?
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o Organization: Is the firm organized to exploit the resource or capability?
Connect® Exercise
CLICK AND DRAG: VRIO
Summary of Activity:
Interactive Classroom Material:
EXAMPLE: Developing Competitive Advantage: Who Dominates the Internet Economy
and Who’s Losing?
Five companies—Amazon, Apple, Facebook, Google, and Microsoft—dominate the Internet
economy. This Example delineates the competitive advantages held by each and also points out
the fragility of their positions. It points to the stack fallacy as one reason for this fragility. Big
Click for follow-up activity.
Forecasting: Predicting the Future
● A forecast is a vision or projecting of the future.
● A trend analysis is a hypothetical extension of a past series of events into the future.
● Contingency planning, also known as scenario planning and scenario analysis, is the
creation of alternative hypothetical but equally likely future conditions.
Interactive Classroom Material:
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
EXAMPLE: Contingency Planning: How Walgreens, and FedEx Coped with Hurricane
Harvey
Companies encounter disasters—natural, economic, and manmade. The question is, can they
survive them? Contingency, or scenario, planning involves putting “what if?” plans in place in
advance of disasters. This Example discusses how three companies (CVS, Walgreen’s, and
FedEx) put contingency plans into play when Hurricane Harvey hit the Gulf coast in 2017.
Click for follow-up activity.
Benchmarking: Comparing with the Best
● Benchmarking is the process by which a company compares its performance with that of
high-performing organizations.
● Benchmarking can be considered as the process of measuring products, services, and
practices against key competitors or companies recognized as industry leaders.
6.4 Establishing Corporate-Level Strategy
POWERPOINTS:
#19 Step 3: Formulate Corporate, Business, and Functional Strategies
#20 Three Types of Corporate Strategies
#21 How Companies Can Implement a Grand Strategy
#22 The BCG Matrix
#23 The Diversification Strategy
Section 6.4 discusses three methods of establishing corporate-level strategy: grand strategies, the
Boston Consulting Group (BCG) matrix, and diversification. Corporate-level grand strategies are
growth, stability, and defensive strategies.
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
This strategy might be a good option for a company when it is in a mature industry, with
limited possibilities for market share growth, but there are strategic tactics that could be
effective in helping the firm to keep from losing market share. If a renewed focus on
marketing or advertising can get previous customers to come back, a defensive strategy
might prevent your competition from taking away your customers. It may be a less risky
approach for achieving a competitive advantage.
2. Identify businesses that you believe are examples of each of the four cells in the BCG
matrix. Explain why you would classify each business as you did.
PepsiCo would be a good company on which to conduct a BCG matrix assessment. The
firm’s products include the drink brands of Pepsi, Mountain Dew, Tropicana, Gatorade
3. Using business press sources, find a recent example of a firm that engaged in related
diversification and one that engaged in unrelated diversification. Evaluate the extent to
which you think each company will be able to create competitive advantage through its
diversification.
Section 6.4 Key Concepts:
Three Overall Types of Corporate Strategy
● Growth strategies involve expansion in sales revenues, market share, number of
employees, or number of customers or clients.
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
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Connect® Exercise
CLICK AND DRAG: Three Common Grand Strategies
Summary of Activity:
In this Click and Drag exercise, students will match provided terms and descriptions with the
correct grand strategy.
The BCG Matrix (Figure 6.5)
● The BCG Matrix is a means of evaluating strategic business units on the basis of their
business growth rates and their share of the market.
● Both market growth and market share are divided into two categories (i.e., high and low),
creating the four-cell matrix in Figure 6.3.
● The BCG Matrix suggests that an organization will do better in fast-growing markets in
which it has a high market share rather than in slow-growing markets in which it has a
low market share.
Connect® Exercise
CLICK AND DRAG: The BCG Matrix
Summary of Activity:
In this Click and Drag exercise, students will match the correct terms from the BCG Matrix into
the correct position.
● Diversification Strategy
Connect® Exercise
CLICK AND DRAG: Diversification
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
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Summary of Activity:
In this Click and Drag exercise, students will further explore diversification by matching the
different types of this strategy with its appropriate examples/definitions.
Connect® Exercise
CLICK AND DRAG: Three Levels of Strategy
Summary of Activity
Connect® Exercise
VIDEO CASE: Impact of CVS and Aetna Merger
Summary of Activity:
Strategic management is extremely important to an organization’s growth and survival. The goal
of this Video Case is to apply students’ knowledge of strategy to the merger of CVS and Aetna.
After watching the video, students will respond to five questions to measure comprehension.
Follow-Up Activity:
6.5 Establishing Business-Level Strategy
POWERPOINTS:
#24 Porter’s Five Competitive Forces
#25 Porter’s Four Competitive Strategies
Section 6.5 discusses Porter’s five competitive forces: (1) threats of new entrants, (2) bargaining
power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services,
and (5) rivalry among competitors. This section also describes the four competitive strategies
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
used for business-level strategy: (1) cost-leadership, (2) differentiation, (3) cost-focus, and (4)
focused-differentiation.
One way that you could begin your coverage of these topics is to have the students watch the
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Grand Design
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● Threats of new entrants are the extent to which new competitors can take away customers
from existing organizations.
Connect® Exercise
CLICK AND DRAG: Porter’s Five Competitive Forces
Summary of Activity:
In this Click and Drag exercise, students will match the provided term or phrase with the
correctly related competitive force from Porter’s five competitive forces.
Porter’s Four Competitive Strategies
● Cost-Leadership Strategy
● Differentiation Strategy
o The differentiation strategy involves offering products or services that are of
unique and superior value compared to those of competitors.
● Cost-Focus Strategy
o The cost-focus strategy involves keeping costs, and hence prices of a product or
service, below those of competitors.
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
Grand Design
● Focused-Differentiation Strategy
Connect® Exercise
CLICK AND DRAG: Porter’s Four Competitive Strategies
Summary of Activity:
In this Click and Drag exercise, students will match different examples with their appropriate
competitive strategy.
Connect® Exercise
CASE ANALYSIS: IKEA Focuses on Growth
Summary of Activity:
This Case Analysis first asks students to read about IKEA’s focus on growth. Students will then
respond to four questions to measure comprehension.
Follow-Up Activity:
SELF-ASSESSMENT 6.2 CAREER READINESS
Core Skills Required for Strategic Planning
CAREER
6.6 Implementing & Controlling Strategy: Execution
POWERPOINT SLIDES:
#27 Step 4: Execute the Strategy
#28 Execution: Getting Things Done
#29 Building a Foundation of Execution
#31 Step 5: Maintain Strategic Control: The Feedback Loop
#32 The Three Core Processes of Business
#33 What Questions Should a Strong Strategic Plan Address?
Section 6.6 describes the last two stages of the strategic-management process: strategic execution
and strategic control.
One way that you could begin your coverage of these topics is to have the students watch the
CBS video “Holiday Shipping Rush.” This 5-minute video profiles how UPS needs to perfectly
implement its strategy of having the millions of packages that its customers have shipped arrive
ONLINE
VIDEO
Kinicki/Williams, Management, 9e: Chapter 6 Strategic Management: How Exceptional Managers Realize a
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McGraw-Hill Education.
organization wants to go. Operations processes provide the path for people to follow.
They create a guide for employees on how to execute on the strategy by establishing
goals and targets.
3. Describe the characteristics of a good strategic plan.
Good strategic plans address nine questions:
1. What is the assessment of the external environment?
2. How well do you understand the existing customers and markets?
3. What is the best way to grow the business profitably and what are the obstacles to
growth?
4. Who is the competition?
5. Can the business execute the strategy?
6. Are the short term and long term balanced?
7. What are the important milestones for executing the plan?
8. What are the critical issues facing the business?
9. How will the business make money on a sustainable basis?
Section 6.6 Key Concepts:
Execution the Strategy
● Strategy execution is putting strategic plans into effect.
Maintaining Strategic Control
● Strategic control consists of monitoring the execution of strategy and taking corrective
action, if necessary.
Execution
● Execution is a central part of any company’s strategy, and it uses questioning, analysis,
and follow-through to mesh strategy with reality, align people with goals, and achieve
results promised.
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● Execution consists of linking the three core processes of any business—people, strategy,
and operations.
o For the people process, managers need to determine which individuals can handle
the jobs of the future and who will benefit them in the future.
o For the strategy process, managers need to consider how success will be
accomplished.
o For the operations process, managers need to consider what path people will
follow, and develop an operating plan.
How Execution Helps Implement and Control Strategy
● Many executives appear to have an aversion to execution, which they associate with the
tedium of doing, as opposed to the excitement of visioning.
● There are many organizational obstacles to effective execution, many of which are
associated with organizational culture.
Interactive Classroom Material:
PRACTICAL ACTION: Building a Foundation of Execution
The foundation of execution is based on leadership (discussed in Chapter 14) and organizational
culture (discussed in Chapter 8). Bossidy and Charan advise managers to engage in the following
behaviors:
Know your people and your business—engage intensely with your employees.
Insist on realism—don’t let others avoid reality.
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Know yourself—do the hard work of understanding who you are.
Click for follow-up activity.
SELF-ASSESSMENT 6.3 CAREER READINESS
Assessing the Obstacles to Strategic Execution
This 15-question Self-Assessment determines obstacles to strategic execution. Students should
Click for Self-Assessment activity.
6.7 Career Corner: Managing Your Career Readiness
POWERPOINT SLIDES:
#34 Model of Career Readiness
#35 Managing Your Career Readiness
Section 6.7 discusses the importance of strategic thinking for career success. People who think
strategically understand the business, develop their task and functional knowledge, set aside time
to reflect and engage in lateral thinking.
One way that you could begin your coverage of these topics is to have the students watch the
TED Talk video “Looking for a Job? Highlight Your Ability, Not Your Experience.” In this
approximately 7-minute video, Jason Shen shares his perspectives on how job seekers can make
Topics and Tips for Discussion:
1. Why is strategic thinking an important skill for all levels of employees in an
organization?
CAREER
READINESS
ONLINE
VIDEO
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Grand Design
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Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
will help employees contribute to the firm’s strategic success, regardless of their role.
Individuals with strategic-thinking skills are forward-looking and able to solve future
problems that are difficult to predict. They have the ability to see the big picture and they
pay attention to what is happening in the world around them. They are also able to see
things from a global perspective. The more employees in a company that possess these
skills, the more effective the company is likely to be in each stage of the strategic–
management process.
2. How could you improve your strategic-thinking skills?
There are four key activities you can engage in to improve your ability to think more
strategically. First, you need to understand your business. Do you understand how your
firm makes money? Can you explain what value your company provides to its customers?
Can you read your firm’s annual report and financial statements and understand what
you are reading? Second, you should broaden your task and functional knowledge. You
3. Describe the “Six Thinking Hats” of lateral thinking.
The six hats refer to different approaches for analyzing information when making
decisions. When using the White Hat, you would focus on gathering the information
Section 6.7 Key Concepts:
Developing Strategic Thinking
• Understand the Business