Journal of Applied Research on Children Informing Policy for.docx

Journal of Applied Research on Children: Informing Policy for
Children at Risk
Volume 6
Issue 2 Nutrition and Food Insecurity Article 7
2015
Sugar In School Breakfasts: A School District's
Perspective
Jennifer G. Lengyel MS, RDN, LD
Houston Independent School District, [email protected]
Nan Cramer RDN, LD
Amanda Oceguera MS, RDN, LD
Lana Pigao MA
Houston Independent School District, Nutrition Services
Department
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Recommended Citation

Lengyel, Jennifer G. MS, RDN, LD; Cramer, Nan RDN, LD;
Oceguera, Amanda MS, RDN, LD; Pigao, Lana MA; and
Houston
Independent School District, Nutrition Services Department
(2015) "Sugar In School Breakfasts: A School District's
Perspective,"
Children at Risk: Vol. 6: Iss. 2, Article 7.
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Introduction
For Houston Independent School District (ISD) Nutrition
Services,
managing the school food operations of the seventh largest
school district
in the nation can be a great challenge and opportunity. It takes
the
collaboration of more than 14 departments and 2,400 employees
to serve
280,000 meals every day across Houston, one of the largest
metropolitan
areas in the nation. To be able to create a menu that balances
nutrition
with student acceptability is an incredible feat. We are
consistently trying
to provide meals that students will consume while enjoying the
health
benefits.
A recent series of emails and phone calls from parents
concerned
about the sugar content of Houston ISD’s school breakfasts
revealed that
a new issue had risen to the surface. Some parents were
counting the

grams of sugar in our breakfast menus and reported that they
believed
there was too much sugar to be healthy for children. This
prompted us to
look closely at the sugar content of our breakfast items and the
source of
the sugar.
Houston ISD, along with all school districts participating in the
National School Lunch and School Breakfast Program, follows a
strict set
of regulations set forth by the U.S. Department of Agriculture
(USDA)
under the Healthy Hunger Free Kids Act (HHFKA) of 2010.
This Act put in
place a new set of nutrition standards and meal patterns for
school
breakfast and lunch in response to the growing epidemic of
childhood
obesity in the U.S. The nutrition standards limit calories,
saturated fat,
and sodium, and ban artificial trans-fat in school meals (see
Table 1).
HHFKA also made a significant change to the breakfast meal
pattern by
increasing the fruit minimum from a half cup to one cup and
having no
requirement for the protein rich meat/meat alternate food group.
Additionally, although we have consciously decided not to place
specific
sweet items on our breakfast menu, the sugar content of our
breakfasts is
being scrutinized. Ironically, the federal standards do not
address the
sugar content in school breakfasts. Whether this is an
oversight or the

authors of the law intentionally did not limit sugar, the result is
the same:
breakfast meals that are higher in sugar because of the
requirement of
one cup of fruit, 1 cup of milk (both which have natural sugar).
Furthermore, restrictions on fat and the lack of requirement for
protein
foods result in carbohydrates, including natural sugar, as the
main source
of calories. Herein, we would like to provide the perspective of
a school
food service organization concerning sugar in breakfast, and
present the
1
Lengyel et al.: Sugar In School Breakfasts: A School District's
Perspective
Published by [email protected] Texas Medical Center, 2015
challenges and efforts made to provide students with healthy,
well-
balanced school breakfasts.
National school lunch program and the school breakfast
program
background and history
In an effort to describe our viewpoint about the sugar content of
our
breakfast menus, it is important to provide the reader with the
context of
the school meal programs history and purpose. School meal

nutrition
standards, which were initially put in place to assure adequate
nutrition for
an underfed population of children, have been adapted through
the years
to meet the current standards that aim to address an overfed, yet
undernourished, population of children.
In the early part of the 20th century, individual cities and states
had
enacted various versions of a school lunch program to improve
nutrition
and feed needy children. Due to a limit in state and local funds,
the federal
government stepped in, and in 1946, the 79th legislature enacted
the
National School Lunch Act. The purpose of the Act was “to
safeguard the
health and well-being of the Nation’s children and…assist the
States, in
providing an adequate expansion of nonprofit school lunch
programs.”1
Lunches served by schools participating in the school lunch
program were
required to meet minimum nutritional requirements prescribed
by the
Secretary [of Agriculture] on the basis of tested nutritional
research."1 The
aim of these meal patterns was to provide school-aged children
with one-
third of their daily nutrient requirements. As dietary
recommendations
evolved with the expansion of nutrition research, various
changes were
made to the school lunch meal requirements during the
subsequent 63

years leading up to the Healthy Hunger Free Kids Act in 2010.
The School Breakfast Program began in 1966 as a pilot-grant
program to provide assistance serving breakfast to nutritionally
needy
children. By 1975, the program was permanently authorized by
congress.
The breakfast meal pattern was designed to provide one-quarter
of the
daily nutrient requirements of school-aged children.
Healthy Hunger Free Kids Act of 2010 and USDA Breakfast
Meal
Pattern
The current Healthy Hunger Free Kids Act (HHFKA) nutrition
standards
are based on the 2010 U.S. Dietary Guidelines and
recommendations
made by the Institute of Medicine. The guidelines recommend a
balance
of calories and physical activity, increased intake of fruits and
vegetables,
2
Children at Risk, Vol. 6 [2015], Iss. 2, Art. 7
whole grains, low fat and fat-free dairy, and a reduction in
saturated fats,
trans fats, sodium, cholesterol and sugar.2 In addressing sugar

in the
diet, the U.S. Dietary Guidelines recommend the reduction of
added sugar
and sugar sweetened beverages without quantifying a
recommended
amount of total sugar per day. The guidelines point out that a
reduction of
added sugars would lower calories without compromising the
nutritional
quality of the diet. The HHFKA breakfast and lunch nutrition
standards
generally follow the U.S. Dietary Guidelines but fail to address
added
sugar in foods. Table 1 outlines the USDA meal pattern and
nutrition
guidelines for school breakfast.3
The USDA has strived to improve student health and reduce
childhood obesity through HHFKA in 2010; however, there have
been
numerous challenges in implementing those changes. For
example, the
recent enforcement of the additional breakfast requirements and
how it
affects the sugar content in school breakfasts. The current
breakfast meal
pattern requires a minimum of one full cup of fruit, one full cup
of milk, and
one ounce whole grain offered each day. In addition, there must
be a
minimum of four items available for students to select, and
three must be
chosen, at least one of which is a fruit or vegetable, in order for
the cost of
that meal to be reimbursed by the federal government. The
breakfast

items are cumulatively analyzed on a daily and weekly basis to
also
ensure that the menu is meeting calorie requirements, saturated
fat, and
sodium restrictions (see Table 1). Of note, there are no
requirements for
meat or meat alternates in the USDA breakfast meal pattern,
meaning that
fruit, milk, and grains that provide calories mainly through
carbohydrates,
are the predominate foods at school breakfast. These regulations
can
greatly affect the breakfast menus, and in regards to the sugar
content,
can make it challenging for a school district to minimize added
sugar due
to calorie minimums, the inability to distinguish added vs.
natural sugar,
budget constraints, availability and variety of breakfast items,
and many
other factors described herein.
3
Perspective

Table 1 Summary of Current USDA Breakfast Meal Pattern
Requirements
Houston ISD Nutrition Services Breakfast Program and
Challenges in
Minimizing Sugar Content
Feeding a population of students, 80% of which are from
economically
disadvantaged homes, is a significant responsibility. Many of
our students
receive the majority of their nutrient intake from school meals.
Students
may receive up to three meals and a snack each day at school.
The
Houston ISD menus are developed through a collaboration of
dietitians,
chefs, cost analyst, operations, and production teams.
Breakfast is especially important in providing nutrition and
improving academic performance, according to research cited
by the Food
Research and Action Center.4 In an effort to improve access to
breakfast
at Houston ISD, in 2009 we began implementation of a program
called
First Class Breakfast that offers free breakfast to all students at
all of our
schools. Currently, we serve more than 118,000 students each
morning.
Serving breakfast in the classroom ensures students have the
opportunity
to eat breakfast if they did not eat at home. Often parents and
school
buses drop off students just before the bell rings, making it

impossible for
students to eat a traditional school breakfast in the cafeteria. In
addition,
most of the cafeterias are not designed to accommodate service
to the
entire student body in a single breakfast period. Serving
breakfast in the
classroom also removes the stigma that school breakfast is
exclusively for
economically disadvantaged students. Regardless of the
roadblocks, we
Components
Amount
Per Week
Amount per
day
Amount
Per Week
Amount
per day
Amount
Per Week
Amount

per day
Fruit 5 cups 1 cup 5 cups 1 cup 5 cups 1 cup
Grains (ounce eq) 7oz 1oz 8 oz 1oz 9oz 1oz
Meat/Meat Alt.* 0 0 0 0 0 0
Milk 5 cups 1 cup 5 cups 1 cup 5 cups 1 cup
Calories (min-max)
Sodium (maximum)**
Saturated Fat (% of
calories)
Trans Fat Nutrition label or manufacturer specif ications must
indicate zero grams of trans fat per serving
<10% <10% <10%
USDA Breakfast Meal Pattern
* 1oz meat/meat alternate can count toward 1oz grain once daily
mimimum grain requirement is met.
K - 5 6-8 9-12
350-500 kcal 400-550 450-650
540mg 600mg 570mg
** 2014/2015 school year sodium levels. Sodium maximums
will have further reductions in 2017/2018

school year and again in 2022/2023 school year.
4
make every effort to provide one of the most important “school
supplies”
children need to be successful in school and beyond.
Table 2 Sample HISD Breakfast Menu
There are two different methods of breakfast service in Houston
ISD schools in accordance with USDA regulations: straight
serve and offer
vs. serve. With the straight serve method, students must take
all foods on
the menu. With the offer vs. serve method, students are only
required to
take three food items, one of which must be a ½ cup of fruit.
This means
that they do not need to take both fruits offered, nor are they
required to
take the milk. Adding up all of the grams of sugar on our entire
breakfast
menu does not give the correct amount of sugar that students
would
consume in most cases because the students might not select all
of the

items offered. An example would be if the menu offered
pancakes, cereal
bar, banana, apple juice and milk. A student could select the
pancakes,
banana and milk only. Or he/she could choose the cereal bar,
banana
and apple juice, etc. Offer vs. serve method helps to reduce
waste in the
Week 1
Monday
Oatmeal Bar
18g sugar, 270 calories
Dried Cranberrries
Fruit Juice Blend
Milk
Average sugar: 53 grams
Average Calories: 482
Week 2
Monday

Texas Cinnamon Toast
Apple Slices
Fruit Juice Blend
Milk
Average sugar: 50.2 grams
Current Straight Serve Menus (K-5)
FridayThursdayWednesdayTuesday
Apple,
15.5g sugar, 77 calories
Milk
Milk

Milk
Multigrain Oat Cereal
Oatmeal Bar
Milk
Fruit Juice Blend
Apple,
Fruit Juice Blend
Blueberry Waffles
7g sugar calories
Apple Muffin

Chicken Biscuit
Peach Cup
Raspberry Yogurt
Banana
Tuesday Wednesday Thursday Friday
Chicken Biscuit
8g sugar , 285 calories
Frosted Corn Cereal (Red. Sugar)
Maple Pancakes
Beef Kolache
Milk

Milk
Milk
Milk
Dried Cranberries
Oatmeal Bar
Banana
Raisins
Fruit Juice Blend
Apple

Fruit Juice Blend
Fruit Juice Blend
14g sugar, K 60 calories
5
Perspective
Average Sugar: 44.77 grams
Average Sugar: 43.09 grams
Current Offer Vs. Serve Menu
Week 1 Week 2
breakfast programs by allowing students the option to select
what food
they want to eat.
The grams of sugar and calories in the offer vs. serve menu
reflect

the averages of the foods the students actually choose. As
apparent from
Table 3, the straight serve menu contains more sugar and
calories than
the offer vs. serve menu since students are taking all the menu
items. It is
important to note that for both methods of service the total
average
calories and grams of sugar are based on what the students
received for
breakfast, not what they actually consumed. Only a series of
tray waste
studies would allow us to determine actual sugar intake among
our
students.
Table 3 Calorie and Sugar Weekly Averages for Breakfast
As mentioned
previously, the USDA
breakfast meal pattern
requires fruit, milk, and
whole grain to be offered
at each breakfast; all are sources of carbohydrates. Federal
regulations
for the school breakfast program set a range of minimum and
maximum
number of calories allowed for a Kindergarten-5th grade
breakfast at 350-
500 calories. The Institute of Medicine recommends 45% of
calories
come from carbohydrate. In that case, the breakfast would have
about 56
grams of carbohydrate. Unfortunately, the federal guidelines

for breakfast
result in a breakfast meal that has a higher percentage of
calories coming
from carbohydrate and potentially in the form of sugar.
It is important to mention that the other sources of calories in a
meal are protein and fat, but according to the HHFKA Nutrition
Standards,
there is no requirement for protein in school breakfast and many
of the
breakfast items offered are required to be low in fat, such as the
milk.
However, schools may substitute meat/meat alternatives for
grain
components after the minimum daily grains requirement is met.
Due to
the lack in requirement for meat/meat alternate items and the
typical
higher cost of these items, meat/meat alternates are not offered
daily. If
offered, they are usually categorized as a grain component in
order to
meet the breakfast meal pattern daily minimums. This results in
school
breakfast menus that are missing a considerate amount of
protein and
calories from protein (4 kcal/g) and potentially contain higher
amounts of
carbohydrates and sugars.
6

Cumulatively, carbohydrate sources can contribute to the sugar
content at breakfast, however, it is important to note the two
different
types of sugar: natural and added. According to the Dietary
Guidelines for
Americans, natural sugars are those found in whole foods like
fluid milk
and milk products (lactose) and fruit (fructose); sugars that are
added to
foods for preservation, processing, or palatability purposes are
called
“added sugars.” In one school breakfast meal, an average of
37g of total
sugar is attributed to natural sugars found in milk and fruit
alone. Based
on the current information available and data from Table 3, we
can
estimate 6-16 g of sugar in our menus is derived from added
sugar.
However, currently the accuracy of the estimated total grams of
added
sugar cannot be verified due to a lack in label differentiation
between the
two types of sugar.
Image 1. FDA Proposed Label
One of the significant
challenges in controlling the
sugar content at breakfast is the
ability to analyze the amount of
total added sugar in a menu and
in individual breakfast items. The

U.S. Dietary Guidelines
recommend that a person
consume no more than 10% of
calories from added sugar.
However, most nutrition fact
labels for foods do not distinguish
natural vs. added sugar; it
appears only as “sugar” that
includes both added and naturally
occurring. Currently, the FDA is
proposing a new label to solve
this issue by requiring
manufacturers to list the amount
of sugar added during the production process and therefore
differentiate
the two types of sugar (see Image 1)5. In the interim, a lack of
nutrition
facts label information makes it difficult to distinguish natural
from added
sugars, and therefore a challenge to reduce total added sugar in
school
breakfast, despite Houston ISD Nutrition Services’ efforts (see
Table 2 for
menu example).
7
Perspective
The USDA School Breakfast Program requirements changed in

2014, increasing fruit servings to a full cup for breakfast. Due
to this
requirement change we have added juice since many fruits such
as a
whole banana, equals only half a cup of fruit; instead of giving
students
two bananas we offer one banana and ½ a cup of juice to meet
the
requirement. Each half-cup of fruit adds 10 to 15 grams of sugar
to the
breakfast meal. We offer dried fruit one to two times a week on
high
school menus for variety and due to high acceptability, adding
22-24
grams in mostly added sugar.
When serving more than 118,000 breakfasts per day with a less
than one-dollar budget per breakfast, providing nutritious
student accepted
items while meeting federal requirements can be arduous. The
additional
fruit offering results in an additional cost that then takes away
from the
amount that can be spent on higher quality or more expensive
breakfast
items. For example, on average most fresh fruit items cost
$0.20 for ½
cup, then because 1 cup of fruit must be offered at breakfast,
fruit alone
can contribute to 50% or more of the total food cost for the
entire breakfast
meal. Often, lower cost fruit juice is served to meet the fruit
requirement,
maintain cost constraints, and provide variety to the fruit
offerings.

In addition, fruit accessibility and diversity has been a
challenge.
With the increase in required daily fruit offerings at breakfast in
combination with years of drought and environmental issues,
many school
districts, especially large districts including Houston ISD, have
experienced numerous produce shortages and resulted in a lack
of
selection. We prefer to serve fresh fruit, however we are
limited on the
variety of whole fruit on the breakfast menu due to our limited
budget and
narrowed vendor availability. While we do sometimes get fruits
from the
USDA Foods Commodity program to assist with the cost, we
only have
them available on a limited basis. In addition, principals have
requested
that certain fruits, such as whole oranges, not be served in the
classrooms
for breakfast because they are messy, further limiting the
variety of fruit.
In many cases, there have been whole fruits that were planned
to be
served on the breakfast menu but due to crop shortages,
inclement
weather patterns or price fluctuations, those fruits had to be
replaced with
canned, dried or juice alternatives. These alternatives can be
more easily
available or affordable, but at the same time less nutrient dense
and/or
contain more added sugar for food preservation purposes,
functional
attributes, and palatability. These barriers combined restrict
accessibility

and increase budgetary constraints, which unfortunately makes
fresh fruit
a limited commodity.
8
Houston ISD Nutrition Services’ Efforts to Reduce Sugar
Content in
Breakfast
With 80% of the Houston ISD population being economically
disadvantaged, it is important to us that students consume the
food in
school in order to get key nutrients they may not be getting
outside of
school. Albeit at times, there can be many challenges to
creating healthy
school breakfast meals, Houston ISD Nutrition Services is
aware of
elevated sugar content and has been making efforts to reduce
sugar
levels in school breakfasts. Chocolate milk is not offered at
breakfast;
only skim or low-fat milk is available. Also, we do not offer
breakfast
sweet rolls or pastries with icing or excessive added sugar,
including
pastry tarts, cinnamon rolls, donuts, honey buns, etc. We serve

whole-
grain rich versions of grain items that are lower in sugar, such
as reduced-
sugar breakfast cereals. Many of the breakfast products that we
purchase
are actually lower in fat, sodium, and sugar and higher in fiber
and
complex carbohydrates than their commercial equivalent. We
are required
to serve whole grains, low fat proteins, low sodium and we
strive to serve
low sugar products. For example, the Cinnamon Toast Crunch
cereal we
serve at Houston ISD is whole grain and lower in sugar than the
regular
version sold in a grocery store. However, our students are
familiar with
this product so the consumption rate is high. These efforts aid
in balancing
food flavors with student acceptance so that students are
consuming the
breakfast items because “it’s not nutrition if they don’t eat it”
according to
Registered Dietitian, Dayle Hayes.
Furthermore, Houston ISD Nutrition Services is continually
meeting
with manufacturers to discuss removing unnecessary additives
from their
ingredients and improve their products. Many of the
manufacturers have
responded by eliminating additives such as Mono Sodium
Glutamate. We
will continue to collaborate with manufacturers and push for
reformulation
of products to reduce added sugar levels in breakfast items.

Additionally, Houston ISD Nutrition Services makes efforts to
control the ingredients in school food by producing in-house,
semi-
homemade items in our state-of-the-art centralized food
production facility.
Our research and development chefs and production team create
items
such as whole-grain-rich beef kolaches, sweet potato spice and
apple
muffins, and chicken biscuits. With scratch made production
items, we
can include whole grain, complex carbohydrates and techniques
such as
using vegetables like sweet potatoes or whole fruits like apples
and
blueberries, to add flavor and nutrition to our recipes instead of
added
sugar.
9
Perspective
We recognize that whole fruit has more nutritional benefits and
fiber
than fruit juice and less added sugar than dried fruit so when
possible,
fresh fruit appears on the breakfast menus. Houston ISD
Nutrition
Services has made great strides to build relationships with

produce
vendors and implement processes to aid in procuring more
whole fruits
and increasing the variety of options offered. We have also
begun to
participate in programs such as Harvest of the Month and Farm-
to-School
in which there is a focus on local and seasonal purchasing and
nutrition
education of fruits and vegetables. These programs have
allowed us to
increase locally sourced produce, educate students and
encourage
consumption of fresh fruits. In addition to these efforts,
Nutrition Services
will be reducing the number of days that juice is offered and
dried
cranberries will be removed from the elementary menu to
further reduce
sugar content.
As mentioned previously, there is no USDA requirement for
protein,
meat or meat alternates. Nutrition Services has committed to
increasing
the meat and meat alternates to replace grain products when
possible by
adding items to the menu such as cheese toast, sausage biscuit,
breakfast taco, breakfast egg sandwich, etc. This will aid in
achieving
adequate calories and …

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Library of Congress Cataloging-in-Publication Data
David, Fred r.
Strategic management: concepts and cases—a competitive
advantage approach / Fred r. David, Francis Marion
University, Florence, South carolina, Forest r. David, Strategic
Planning consultant.—Sixteenth edition.
pages cm
iSBn 978-0-13-416784-8 (alk. paper) — iSBn 0-13-416784-8
(alk. paper)

1. Strategic planning. 2. Strategic planning—case studies. i.
David, Forest r. ii. title.
HD30.28.D3785 2015
658.4'012—dc23
2015021210
10 9 8 7 6 5 4 3 2 1
iSBn 10: 0-13-416784-8
iSBn 13: 978-0-13-416784-8
Unless otherwise indicated herein, any third-party trademarks
that may appear in this work are the property of their
respective owners and any references to third-party trademarks,
logos or other trade dress are for demonstrative or
descriptive purposes only. Such references are not intended to
imply any sponsorship, endorsement, authorization,
or promotion of Pearson’s products by the owners of such
marks, or any relationship between the owner and Pearson
education, inc. or its affiliates, authors, licensees or
distributors.
http://www.pearsoned.com/permissions/
Thank you to the following companies
that graciously provided the substance of the Cohesion Cases
over a 30-year span of 16 editions of this book.
• 1st edition, 1987: Ponderosa
• 2nd edition, 1989: Ponderosa
• 3rd edition, 1991: Hershey Company
• 4th edition, 1993: Hershey Company

• 8th edition, 2001: America Online (AOL)
• 9th edition, 2003: American Airlines
• 10th edition, 2005: Krispy Kreme Doughnuts, Inc.
• 11th edition, 2007: Google Inc.
• 12th edition, 2009: The Walt Disney Company
• 13th edition, 2011: Apple, Inc.
• 14th edition, 2013: McDonald’s Corporation
• 15th edition, 2015: PepsiCo, Inc.
Brief Contents
Preface xvii
Acknowledgments xxxi
About the Authors xxxiii
Part 1 Overview of Strategic Management 2
Chapter 1 The Nature of Strategic Management 3
The Cohesion Case: The heRsheY CoMPanY, 2015 (hsY) 26
Part 2 Strategy Formulation 38
Chapter 2 The Business Vision and Mission 39
Chapter 3 The External Assessment 59
Chapter 4 The Internal Assessment 89
Chapter 5 Strategies in Action 129
Chapter 6 Strategy Analysis and Choice 167

Part 3 Strategy Implementation 204
Chapter 7 Implementing Strategies: Management, Operations,
and Human Resource Issues 205
Chapter 8 Implementing Strategies: Marketing,
Finance/Accounting, R&D, and MIS Issues 243
Part 4 Strategy Evaluation 278
Chapter 9 Strategy Review, Evaluation, and Control 279
Part 5 Key Strategic-Management topics 304
Chapter 10 Business Ethics, Social Responsibility, and
Environmental Sustainability 305
Chapter 11 Global and International Issues 329
Part 6 Strategic-Management Case analysis 356
How to Prepare and Present a Case Analysis 357
Glossary 627
Name Index 637
Subject Index 643
vii
Contents
Preface xvii
Acknowledgments xxxi

About the Authors xxxiii
Part 1 Overview of Strategic
Management 2
Chapter 1 the Nature of Strategic
Management 3
exeMPlaRY CoMPanY showCased: aPPle, inC. 4
what is strategic Management? 4
What Is a Cohesion Case? 5 • Defining Strategic Management 5
stages of strategic Management 5
integrating intuition and analysis 6
Adapting to Change 7
Key Terms in strategic Management 8
Competitive Advantage 8 • Strategists 8
aCadeMiC ReseaRCh CaPsule 1-1: when aRe Chief
sTRaTegY offiCeRs (Csos) hiRed/aPPoinTed? 9
Vision and Mission Statements 10 • External Opportunities
and Threats 10 • Internal Strengths and Weaknesses 11 •
Long-Term Objectives 12 • Strategies 12 • Annual
Objectives 12 • Policies 13
The strategic-Management Model 14
aCadeMiC ReseaRCh CaPsule 1-2: whaT aCTiviTY is
Most IMportant In the strategIc-ManageMent
PRoCess? 15
Benefits of engaging in strategic Management 15
Financial Benefits 16 • Nonfinancial Benefits 17

why some firms do no strategic Planning 17
Pitfalls in strategic Planning 18
Comparing Business and Military strategy 18
iMPliCaTions foR sTRaTegisTs 20
iMPliCaTions foR sTudenTs 21
Chapter summary 21
Key Terms and Concepts 22
Issues for Review and Discussion 22
Mini-Case on The KRogeR CoMPanY: whaT aMeRiCan
CoMPanY does The BesT JoB of sTRaTegiC
Planning? 24
Current Readings 25
Endnotes 25`
The Cohesion Case: The heRsheY CoMPanY, 2015 26
assuRanCe of leaRning exeRCises 35
Assurance of Learning Exercise 1A: Compare Business Strategy
with
Military Strategy 35
Assurance of Learning Exercise 1B: Gather Strategy
Information
for the Hershey Company 35
Assurance of Learning Exercise 1C: Update the Hershey
Cohesion
Case 36
Assurance of Learning Exercise 1D: Strategic Planning for Your
University 36
Assurance of Learning Exercise 1E: Strategic Planning at a
Local
Company 37
Assurance of Learning Exercise 1F: Get Familiar with the
Strategy
Club Website

Assurance of Learning Exercise 1G: Game Plans vs. Strategic
Plans:
Teams vs. Companies
Part 2 Strategy Formulation 38
Chapter 2 the Business Vision and Mission 39
exeMPlaRY CoMPanY showCased: h&R BloCK 40
vision statements: what do we want to Become? 40
Vision Statement Analysis 41
Mission statements: what is our Business? 42
The Process of developing vision and Mission
statements 43
The importance (Benefits) of vision and Mission
statements 44
aCadeMiC ReseaRCh CaPsule 2-1: The Mission sTaTeMenT/
fiRM PeRfoRManCe linKage 44
A Resolution of Divergent Views 45
Characteristics of a Mission statement 46
A Customer Orientation 47
Components of a Mission statement 47
evaluating and writing Mission statements 48
Two Mission Statements Critiqued 49 • Five Mission Statements
Revised 49 • Two Mission Statements Proposed 49
Chapter summary 52

Assurance of Learning Exercise 2A: Develop an Improved
BB&T Mission
Statement 54
Assurance of Learning Exercise 2B: Evaluate Three Mission
Statements 54
Assurance of Learning Exercise 2C: Write a Vision and Mission
Statement
for the Hershey Company 55
Assurance of Learning Exercise 2D: Compare Your College or
University’s
Vision and Mission Statements to That of a Leading
Rival Institution 55
Assurance of Learning Exercise 2E: Conduct Mission Statement
Research 55
Mini-Case on walT disneY CoMPanY: whaT is disneY’s
vision foR The fuTuRe and Mission foR The PResenT? 56
Current Readings 56
Endnotes 57
ix
37
37
Chapter 3 the External assessment 59
exeMPlaRY CoMPanY showCased: ChiPoTle
MexiCan gRill 60
The Purpose and nature of an external audit 61
Key External Forces 61 • The Process of Performing an External

Audit 62 • The Industrial Organization (I/O) View 63
Ten external forces That affect organizations 63
Economic Forces 63 • Social, Cultural, Demographic, and
Natural Environment Forces 65 • Political, Governmental, and
Legal Forces 66 • Technological Forces 68 • Competitive
Forces 69
Porter’s five-forces Model 71
Rivalry among Competing Firms 72 • Potential Entry of New
Competitors 73 • Potential Development of Substitute
Products 73 • Bargaining Power of Suppliers 73
• Bargaining Power of Consumers 74
sources of external information 74
forecasting Tools and Techniques 74
Making Assumptions 75 • Business Analytics 76
The external factor evaluation Matrix 77
The Competitive Profile Matrix 78
iMPliCaTions foR sTudenTs
Chapter summary 82
Assurance of Learning Exercise 3A: Competitive Intelligence
(CI)
Certification 84
Assurance of Learning Exercise 3B: Develop an EFE Matrix for
Hershey Company 84
Assurance of Learning Exercise 3C: Perform an External
Assessment 85

Assurance of Learning Exercise 3D: Develop an EFE Matrix for
Your
University 85
Assurance of Learning Exercise 3E: Comparing Chipotle
Mexican
Grill to Panera Bread and Moe’s Southwest Grill 85
Assurance of Learning Exercise 3F: Develop a Competitive
Profile
Matrix for Hershey Company 86
Assurance of Learning Exercise 3G: Develop a Competitive
Profile
Matrix for Your University 86
Mini-Case on CoaCh, inC.: whY aRe The ladies
shunning CoaCh? 86
Current Readings 87
Endnotes 87
Chapter 4 the Internal assessment 89
exeMPlaRY CoMPanY showCased: neTflix, inC. 90
The nature of an internal audit 90
Key Internal Forces 91 • The Process of Performing an Internal
Audit 92 • The Resource-Based View 93
aCadeMiC ReseaRCh CaPsule 4-1: does RBv TheoRY
deTeRMine diveRsifiCaTion TaRgeTs? 93
integrating strategy and Culture 94
Management 96
Planning 96 • Organizing 97 • Motivating 98
• Staffing 98 • Controlling 99 • Management Audit
Checklist of Questions 99
Marketing 100

Customer Analysis 100 • Selling Products and Services 100
• Product and Service Planning 101 • Pricing 101
• Distribution 102 • Marketing Research 102 • Cost/Benefit
Analysis 102 • Marketing Audit Checklist of Questions 103
finance/accounting 103
Finance/Accounting Functions 103 • Financial Ratios 104
• Breakeven Analysis 107 • Finance/Accounting Audit
Checklist 109
Production/operations 109
Production/Operations Audit Checklist 110
Research and development 111
Internal and External Research and Development 111 • Research
and Development Audit 112
Management information systems 112
Managing Voluminous Consumer Data 112
aCadeMiC ReseaRCh CaPsule 4-2: new TRends
in Managing Big daTa 113
Management Information Systems Audit 113
value Chain analysis 113
Benchmarking 114
The internal factor evaluation Matrix 116
Chapter summary 121
Assurance of Learning Exercise 4A: Apply Breakeven Analysis

123
Assurance of Learning Exercise 4B: Compare Netflix with
Redbox 123
Assurance of Learning Exercise 4C: Perform a Financial Ratio
Analysis
for Hershey Company 124
Assurance of Learning Exercise 4D: Construct an IFE Matrix
Assurance of Learning Exercise 4E: Construct an IFE Matrix
for Your University 124
Assurance of Learning Exercise 4F: Applying Research-Based
View (RBV) Theory 125
Mini-Case on Buffalo wild wings, inC.: whaT do
ouTsTanding ManageMenT, MaRKeTing, and finanCe
exeCuTives do TogeTheR? 125
Current Readings 126
Endnotes 126
Chapter 5 Strategies in action 129
exeMPlaRY CoMPanY showCased: signeT
JeweleRs liMiTed 130
long-Term objectives 130
Characteristics and Benefits of Objectives 131 • Financial
versus
Strategic Objectives 131 • Avoid Not Managing by Objectives
132
Types of strategies 132
Levels of Strategies 134
integration strategies 134
Forward Integration 135 • Backward Integration 136 •
Horizontal Integration 137

intensive strategies 138
Market Penetration 138 • Market Development 138
• Product Development 139
x CONTENTS
82
diversification strategies 139
Related Diversification 140 • Unrelated Diversification 140
defensive strategies 141
Retrenchment 141 • Divestiture 142 • Liquidation 143
Michael Porter’s five generic strategies 144
Cost Leadership Strategies (Type 1 and Type 2) 145 •
Differentiation Strategies (Type 3) 146 • Focus Strategies
(Type 4 and Type 5) 147
Means for achieving strategies 148
Cooperation among Competitors 148 • Joint Venture
and Partnering 148
aCadeMiC ReseaRCh CaPsule 5-1: aRe inTeRnaTional
allianCes MoRe effeCTive wiTh CoMPeTiToRs oR
nonCoMPeTiToRs? 149
Merger/Acquisition 150 • Private-Equity Acquisitions 151
Tactics to facilitate strategies 152
First Mover Advantages 152 • Outsourcing and Reshoring 152
strategic Management in nonprofit, governmental,
and small firms 154

Educational Institutions 154 • Medical Organizations 155 •
Governmental Agencies and Departments 155 • Small Firms 155
aCadeMiC ReseaRCh CaPsule 5-2: whaT aTTRiBuTes do
gReaT enTRePReneuRs Possess? 156
Chapter summary 157
Assurance of Learning Exercise 5A: Develop Hypothetical
Hershey
Company Strategies 159
Assurance of Learning Exercise 5B: Horizontal Integration in
Practice 160
Assurance of Learning Exercise 5C: What Strategies Should
Hershey
Pursue in 2017? 160
Assurance of Learning Exercise 5D: Examine Strategy
Articles 160
Assurance of Learning Exercise 5E: Classify Some Recent
Strategies 161
Assurance of Learning Exercise 5F: How Risky Are Various
Alternative
Strategies? 162
Assurance of Learning Exercise 5G: Develop Alternative
Strategies for
Your University 162
Mini-Case on linKedin CoRPoRaTion: should linKedin
CooPeRaTe wiTh faCeBooK? 163
Endnotes 164

Chapter 6 Strategy analysis and Choice 167
exeMPlaRY CoMPanY showCased: sMiTh & wesson
holding CoRPoRaTion 168
The strategy analysis and Choice Process 168
The Process of Generating and Selecting Strategies 168
The strategy-formulation analytical framework 170
The Input Stage 171 • The Matching Stage 171 •
The Decision Stage 171
The swoT Matrix 171
The strategic Position and action evaluation (sPaCe) Matrix 174
The Boston Consulting group (BCg) Matrix 178
The internal-external (ie) Matrix 181
aCadeMiC ReseaRCh CaPsule 6-1: a new ie MaTRix 184
The grand strategy Matrix 185
The decision stage: The Quantitative strategic Planning
Matrix (QsPM) 186
Positive Features and Limitations of the QSPM 189
Cultural aspects of strategy analysis and Choice 190
The Politics of strategy analysis and Choice 190
Boards of directors: governance issues 191
aCadeMiC ReseaRCh CaPsule 6-2: how ManY BoaRd
of diReCToRs MeMBeRs aRe ideal? 193
Chapter summary 195

Assurance of Learning Exercise 6A: Perform a SWOT Analysis
Assurance of Learning Exercise 6B: Develop a SPACE Matrix
for Hershey 199
Assurance of Learning Exercise 6C: Develop a BCG Matrix for
Hershey 199
Assurance of Learning Exercise 6D: Develop a QSPM for
Hershey 199
Assurance of Learning Exercise 6E: Formulate Individual
Strategies 200
Assurance of Learning Exercise 6F: Develop a BCG Matrix for
Your
University 200
Assurance of Learning Exercise 6G: The Role of Boards of
Directors 200
Assurance of Learning Exercise 6H: Locate Companies in a
Grand
Strategy Matrix 201
Mini-Case on The sTaRBuCKs CoRPoRaTion: whaT
sTaRBuCKs sTRaTegies aRe BesT? 201
Endnotes 202
Part 3 Strategy Implementation 204
Chapter 7 Implementing Strategies: Management,
Operations, and Human resource
Issues 205
exeMPlaRY CoMPanY showCased: PaPa John’s
inTeRnaTional, inC. 206
Transitioning from formulating to implementing
strategies 206
The need for Clear annual objectives 208

The need for Clear Policies 211
allocate Resources and Manage Conflict 211
Allocate Resources 211 • Manage Conflict 213
Match structure with strategy 213
Types of organizational structure 214
The Functional Structure 214 • The Divisional Structure 215 •
The Strategic Business Unit (SBU) Structure 217 • The Matrix
Structure 218
CONTENTS xi
dos and don’ts in developing organizational Charts 219
aCadeMiC ReseaRCh CaPsule 7-1: whY is The Coo
PosiTion Being deleTed in ManY oRganizaTions? 221
strategic Production/operations issues 222
Restructuring and Reengineering 222 • Manage Resistance to
Change 223 • Decide Where and How to Produce Goods 223
• Employee Stock Ownership Plans (ESOPs) 224
strategic human Resource issues 225
Linking Performance and Pay to Strategy 225 • Balance Work
Life
and Home Life 227 • Develop a Diverse Workforce 228
aCadeMiC ReseaRCh CaPsule 7-2: how do woMen vs. Men
Ceos PeRfoRM? 229
Use Caution in Hiring a Rival’s Employees 229 • Create a
Strategy-
Supportive Culture 232 • Use Caution in Monitoring
Employees’

Social Media 233 • Develop a Corporate Wellness Program 233
Chapter summary 237
Assurance of Learning Exercise 7A: Critique Corporate
Organizational
Charts 239
Assurance of Learning Exercise 7B: Draw an Organizational
Chart for
Hershey Company Using a Free, Online Template 239
Assurance of Learning Exercise 7C: Do Organizations Really
Establish
Objectives? 239
Assurance of Learning Exercise 7D: Understanding Your
University’s
Culture 240
Mini-Case on hilTon woRldwide holdings:
is The new hilTon PoliCY waRRanTed? 240
Endnotes 241
Chapter 8 Implementing Strategies: Marketing,
Finance/accounting, r&D, and MIS
Issues 243
exeMPlaRY CoMPanY showCased: fooT
loCKeR, inC. 244
strategic Marketing issues 244
social Media Marketing 245

Market segmentation 247
Product Positioning and Perceptual Mapping 250
Author Commentary 251
strategic finance/accounting issues 253
ePs/eBiT analysis: acquire needed Capital 254
Projected financial statements 258
Projected financial statement analysis for d. R. horton 260
Corporate valuation 262
aCadeMiC ReseaRCh CaPsule 8-1: when should
we oveRPaY To aCQuiRe a fiRM? 264
Corporate Valuation Methods 264
iPos, Cash Management, and Corporate Bonds 266
Go Public With An IPO? 266
Keep Cash Offshore if Earned Offshore? 267
Issue Corporate Bonds for What Purpose? 267
strategic Research and development (R&d) issues 267
strategic Management information systems (Mis) issues 269
Mobile Tracking of Employees 270
Mobile Apps for Customers 271
Chapter summary 271
assuRanCe of leaRning exeRCises
Assurance of Learning Exercise 8A: Develop a Product-
Positioning
Map for Hershey Company

Assurance of Learning Exercise 8B: Gain Practice Developing
Perceptual Maps 274
Assurance of Learning Exercise 8C: Perform an EPS/EBIT
Analysis
Assurance of Learning Exercise 8D: Prepare Projected Financial
Statements for Hershey Company
Assurance of Learning Exercise 8E: Determine the Cash Value
of Hershey Company 275
Assurance of Learning Exercise 8F: Develop a Product-
Positioning
Map for Your University 275
Assurance of Learning Exercise 8G: Do Banks Require
Projected
Financial Statements? 27
Mini-Case on aliBaBa gRouP holding lTd.: is selling
sToCK oR Bonds BesT To Raise CaPiTal? 276
Endnotes 277
Part 4 Strategy Evaluation 278
Chapter 9 Strategy review, Evaluation,
and Control 279
exeMPlaRY CoMPanY showCased: niKe, inC. 280
The strategy-evaluation Process, Criteria,
and Methods 280
The Process of Evaluating Strategies 283
The Three strategy-evaluation activities 284
Reviewing Bases of Strategy 284 • Measuring Organizational
Performance 286 • Taking Corrective Actions 287

The Balanced scorecard 289
Published sources of strategy-evaluation information 291
Characteristics of an effective strategy evaluation system 291
Contingency Planning 292
auditing 293
Twenty-first-Century Challenges in strategic
Management 294
The Art or Science Issue 294 • The Visible or Hidden
Issue 295 • The Top-Down or Bottom-Up Approach 296
guidelines for effective strategic Management 296
Chapter summary 299
xii CONTENTS
274
274
275
6
Assurance of Learning Exercise 9A: Examine 100 Balanced
Scorecards 300
Assurance of Learning Exercise 9B: Prepare a Strategy-
Evaluation Report

Assurance of Learning Exercise 9C: Evaluate Your University’s
Strategies 301
Mini-Case on TJx CoMPanies, inC.: is seCReT sTRaTegiC
Planning BesT foR TJx? 301
Endnotes 302
Part 5 Key Strategic-Management
topics 304
Chapter 10 Business Ethics, Social responsibility,
and Environmental Sustainability 305
exeMPlaRY CoMPanY showCased:
ChiCK-fil-a 306
why “good ethics is good Business” 306
Does It Pay to Be Ethical? 307
aCadeMiC ReseaRCh CaPsule 10-1: whaT Can we
leaRn fRoM high-PeRfoRManCe CoMPanies? 308
aCadeMiC ReseaRCh CaPsule 10-2: who is PRone
To Be uneThiCal in a Business? 309
How to Establish an Ethics Culture 309
whistle-Blowing, Bribery, and workplace Romance 310
Whistle-Blowing 310 • Avoid Bribery 311 • Workplace
Romance 312
social Responsibility and Policy 313
aCadeMiC ReseaRCh CaPsule 10-3: does iT PaY To Be
soCiallY ResPonsiBle? 314
Design and Articulate a Social Policy 314 • Social Policies on
Retirement 314

environmental sustainability 315
What Firms Are the Best Stewards? 316 • Sustainability
Reports 317 • The Office of Environmental Affairs 318 •
ISO 14000/14001 Certification 318
wildlife welfare 319
Food Suppliers and Animal Welfare 321
Chapter summary 322
Assurance of Learning Exercise 10A: How Does Your
Municipality
Compare to Others on Being Pollution-Safe? 323
Assurance of Learning Exercise 10B: Does Hershey Company or
Mars, Inc.
Win on Sustainability? 324
Assurance of Learning Exercise 10C: The Ethics of Spying on
Competitors 324
Assurance of Learning Exercise 10D: Who Prepares a
Sustainability
Report? 325
Mini-Case on avon PRoduCTs, inC.: would ClaiMs
of eThiCal wRongdoing BY a CoMPanY iMPaCT
YouR BuYing The fiRM’s PRoduCTs? 325
Endnotes 326
Chapter 11 Global and International
Issues 329

exeMPlaRY CoMPanY showCased: alCoa, inC. 330
The nature of doing Business globally 330
Multinational Firms 332 • Different Languages
Globally 333 • Labor Unions across Europe 333
aCadeMiC ReseaRCh CaPsule 11-1: how ManY
languages aRe TheRe gloBallY? 333
advantages and disadvantages of doing Business
globally 334
The global Challenge 335
aCadeMiC ReseaRCh CaPsule 11-2: how do fiRMs
deCide wheRe To exPand? 336
Tax Rates and Tax inversions 336
Tax Rates 336 • Tax Inversions 338
american versus foreign Business Culture 338
Communication Differences across Countries 340
Business Culture across Countries 341
Mexico’s Business Culture 341 • Japan’s Business Culture 342 •
China’s Business Culture 343 • India’s Business Culture 344
Business Climate across Countries 344
Africa’s Business Climate 345 • China’s Business Climate 346 •
Brazil's Business Climate 347 • Indonesia’s Business Climate
347 •
India’s Business Climate 347 • Japan’s Business Climate 348 •
Mexico’s …

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