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Running head: KONAMI
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KONAMI
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Project 1: External Environmental Analysis
Travis Smith
Dr. Andrew Wyner
UMUC University
16 April 2019Company Overview
Konami Holdings was founded in 1969 and was the
brainchild of Kagemasa Kozuki. The company operated in the
digital entertainment segment of the industry and was operating
in four different segments which helped in diversifying the
business model of the company. These four segments included
games, health, entertainment (digital), and pachislot &
Pachinko. Each of its businesses operates in a different segment
but in the digital domain which helps in diversifying the
business. The company has been operating for several decades
and remained successful in establishing its places in the market.
It is known for the mobile games it creates mainly but card
games along with arcade games are also its specialty. Its health
segment has provided credible products and services to clients
in the health and fitness segment of the market. Not only does
the company provide digital fitness products but it also creates
machines for fitness that are widely used.
The company was mainly founded to create products for
amusement and entertainment of people as it found a gap in the
market. The founder of the company realized that there were not
many companies operating in the digital entertainment segment
and hence, decided to seize this opportunity to enter the market.
The company’s capital kept increasing over the years and by
1979, it was selling products in the US. Given that the company
had a humble start in Osaka as a repair and gaming shop, it
proved to be a success story many years later through its
constant innovation and proper planning. Although the company
is known by its founder and current chairman, Kagemasa
Kozuki born in Osaka, Japan and he is son of it must be noted
that a few other people by the names of Hiro Matsuda,
Yoshinobu Nakama, and Shokichi Ishihara also played a crucial
role in the progress of the company over the years. It is
interesting to note that the company’s name is an amalgam of
the first letters of the names of all these people which
highlights their importance in the success and progress of the
company.
The games produced by the company were very popular in Japan
which encouraged the company to start selling them in other
regions as well. Amongst the international markets targeted by
the company, USA turned out to be the most profitable one as
the demand in this market was good. With the changing times
and the popularity of the internet, the company also decided to
evolve its business landscape by producing computer games.
Just like arcade games and other products, the company was
able to make its place in the domain of computer games in no
time. The most popular computer games produced by the
company includes Fortune Trip and Teenage Mutant Ninja
Turtle. Today, the company provides software for popular
gaming consoles such as Nintendo Wii, and Playstation. Hence,
the company has remained successful in this market by actively
evolving its business model and changing with the times to
provide the best quality products and services to its target
audience.
The company has been doing well in financial terms as well. It
can be seen from the financial statements of the company for
the past several years that it has a steady stream of revenue and
profits. For example, in the year 2018, the company earned a
revenue of 239,497 million Japanese Yen (JPY) and in 2017, it
earned 229,922 JPY. According to Bloomberg, the company has
4,706 employees presently. General Environment (PESTLE)
The external environment in which Konami operates is
becoming competitive with every passing day. With new
companies striving to get a larger chunk of the market share, it
has become necessary for the existing companies like Konami to
constantly upgrade their products and services and never stop
innovating. In order to understand the external environment of
the company in a better way, the section below presents the
PESTLE analysis which sheds light on the political, economic,
social, technological, legal, and environmental landscape in
which the company operates.
Political
According to Osaki (2019, p. 2), Japan’s political
landscape is going to be ‘hectic’ as it will go through massive
changes in the year of 2019 such as the end of Emperor
Akihito’s era and the commencement of a new time for the
country. While it sounds exciting and progressive, it must be
noted that political changes always come with uncertainty which
impacts the economic well-being and international standing of a
country. It is expected that political tension is going to increase
later in the year which is going to impact businesses operating
in all industries. For Konami, this will be a tumultuous time as
its products do not fall in the category of daily consumption of
necessity but are rather more inclined towards luxury. When
such a situation occurs, people stop or reduce the consumption
of luxury products and services. Some can say that the company
has both B2B and B2C consumers which makes it better
prepared for such challenges. However, it must be noted that the
company’s B2B customers are eventually targeting B2C market
where the customer demand will fall. Hence, this will impact
both segments and all industries and decrease the profits of the
company.
Economic
As mentioned in the prior section, the economic well-being of a
company is linked with the political stability of the country.
Given that the political landscape of the country is going
through changes in this year, there is definitely going to be an
impact, possibly negative, on the economy of the country.
According to Osaki (2019, p.3), there is going to be an increase
in consumption tax in Japan following the elections which will
increase the rates from 8% to 10%. This will have a huge impact
on the consumption pattern of people and hence, negatively
impact the business growth of the companies in all sectors.
Baird (2019, p.1) states that the income of people is barely
growing in Japan which, when paired with the anticipated
economic risks, will bring an economic downturn of a few years
for the country. However, the country is one of the top three
strongest economies in the world which provides it a cushion to
fall on in cases of economic downtimes.
Social
The country of origin of Konami is Japan which has a unique
social structure and cultural norms. The country is mainly
comprised of islands four of which are big ones and the rest of
the country is formed by numerous small ones. The country
touches the Pacific Ocean on one side as well. In addition to
that, the country is located on a major fault lines which means
that it frequently is targeted by earthquakes. On top of that, the
country also has several volcanoes. This means that
geographically, the country is situated in critical region which
is poses several threats to the well-being of the nation.
However, the country has managed to survive all the natural
disasters over time. It must be noted that the country is mainly
an urban sphere as a large chunk of its population dwells in
urban areas. The main and official language spoken in the
country is Japanese. The country made sure that it brought unity
in the nation by having one official language and one main
dialect. Now, education is also given in Japanese in the country
and official language is also the same. The Japanese society is
strongly connected to its cultural roots which are given
importance in everyday life in the country. The Japanese
cultural forms the basis of even business life and is grounded in
feelings of love and respect for others (especially elders). The
highly educated population of Japan makes it necessary for
corporations like Konami to be truthful in their messaging as
the consumers are knowledgeable. In addition to this, Japanese
customers are known for their desire for high quality products
which puts pressure on the corporations to come up with the
right match of products and services with the consumer needs.
Technology
Japan is known for producing highly innovative products. It is
the home of companies like Samsung which is competing
against Apple Incorporation all over the world. The country has
good environment for the growth and progress of new ventures
on the basis of its strong technological system. The country is
rapidly embracing new technological trends and moving towards
the creation of a smart society where AI and IoT will prevail
and guide consumer experience. The government is very
supportive and is trying its best to facilitate the development of
technological landscape of the country. This means that for
companies like Konami, it is imperative to constantly innovate
to stay aligned with the country’s and consumers’ goal of being
technologically advanced in every possible manner. When it
comes to the gaming industry, artificial intelligence and internet
of things are the two major trends that are dominating the
technology world and will have an impact on the gaming
industry as well.
Legal
Konami is based in a country where the corporate taxation is
higher as compared to that in the region. Although the taxation
system is very transparent, it still is a cost burden on
corporations. In addition to this, the country has strict laws
regarding quality control and transparency of operations which
requires corporations to be truthful in what they convey to the
customers and through their advertisements. The country also
has a strong legal system which keeps corporations under
scrutiny for any misdemeanor and ensures that the consumers
are protected. However, the country’s legal system also favors
the growth and progress of businesses which are strong pillars
of its economic system.
Environmental
According to Sumikura and Osborn (1998, p.1), the
Environment Protection Agency was founded in 1971 in Japan
in the wake of rapid development in the country which
negatively impacted the environment and required immediate
action in the years leading up to 1960s. Since then, the country
has made sure to protect the environment with the help of a
number of rules and regulations. The country has been growing
rapidly in terms of economy which means that the growth of
industrialization would have a severe impact on the
environment. Realizing this, the government urged the
Environment Protection Agency to play its part in conserving
the environment. The country now has Basic Environment Law
and is ensuring sustainable development. This means that
companies like Konami have to follow these rules and play their
part in conserving the environment. Konami Holdings is already
working on this aspect of its business by streamlining its
processes to reduce their impact on the environment. It is also
taking care of the rights of its employees and customers to
operate in a more sustainable manner. In the future, the
company needs to align its processes more with the
environmental conservation goals of the country and SDGs.
Trend Impacting the Gaming Industry
One trend which has the ability to impact the gaming industry
on a massive scale is the rapid development of technology. Jha
(2017, p.2) states that artificial intelligence has significantly
impacted the gaming industry by giving life to virtual world of
games. Artificial intelligence has been enhancing the experience
of gamers through smart usage of data available. Soon, machine
learning will become a part of the process too to further the
experience of gamers. In addition to this, two dimensional
games are going to be replaced by three dimensional games in
the near future which will free the gaming world of the
limitations posed by two dimensional technology. The impact of
technology can be seen from the fact that games can now be
played online with people participating from all over the world
and creating a whole new world of interactive games. What
previously used to be geographically limited is now accessible
worldwide. Buff (2018, p. 2) states that the growth of gaming
industry is dependent on technological advancements as it
allows the gaming industry to broaden its perspective and
develop new products that eventually leads to an increase in the
revenue of the industry. Hence, the trend that will be the most
impactful for the gaming industry is the change in technology.
Areas of Uncertainty Related to Trends
In light of the above-mentioned discussion, it can be seen that
there are certain areas of uncertainty which can compel the
company to change its strategy. The most important area of
uncertainty arises out of political situation. Konami is based in
Japan which is undergoing political changes that have given rise
to uncertainty. These changes can impact economy of the
country as well which can directly impact the well-being of
corporations. In addition to this, economic changes can impact
the strategies of the company as well. Konami is a global player
in the gaming industry which means that economic changes
happening beyond the border of Japan are also going to impact
the well-being of Konami. Hence, if economic changes occur
within or outside of Japan, the company will have to change its
strategies accordingly. Furthermore, technological changes are
happening rapidly which bring with them a lot of uncertainty.
As the trends change, companies have to change the way they
operate in the gaming industry as well. Therefore, Konami
needs to be aware of current and anticipated technological
advancements to mold its strategies accordingly.Industry
Evaluation
Although Konami has a strong base in Japan, it sells its
products and services worldwide which makes it a global player
in the gaming industry. The major competitors of Konami
globally are Sony, Blizzard, and EA. The major regions where
gaming software and services are popular include USA, Middle
East, China, and Japan. The competitor analysis of the company
discussed below.
Porter’s Five Forces
Mentioned below are the Porter’s Five Forces regarding the
gaming industry in which Konami operates?
· Market competition: The competition in the gaming industry is
high as can be seen from the big names that are a part of it
globally. According to Wijman (2018, p.1), $137.9 billion was
the anticipated revenue for the global gaming industry for the
year 2018. Seeing the massive amount of revenue generated in
this area, gaming industry receives several new players every
year. These small players are not able to match the skills of
established players like Konami and Sony. However, they do
have the potential to collectively take away a substantial share
of the revenue in this industry. In addition to this, the era of
digitalization and smartphones has opened more avenues to gain
revenue and hence, increased competitors. The number of
mobile game players is increasing with every passing day which
makes mobile games a new hot market. In the past few years,
mobile games like Candy Crush and Temple Run gained
popularity massively. Anderton (2017, p. 3) believes that in the
coming years, there is going to be fierce competition in the
gaming industry.
· Threat of new entrants: The threat of new entrants is high in
the gaming industry. This can be seen especially in the mobile
games segment where almost anyone can create a game and
upload it on app store and play store for the masses to play.
While the gaming software segment is a bit more complicated to
enter, there is no barrier to entry as such for new entrants which
makes it possible for new companies to enter the market with
ease. Depersio (2018, p. 11) states that due to low entry barriers
and lack of regulations, the threat of new entrants is high in the
gaming software industry.
· Supplier power: Since games are considered a luxury
especially the ones for Nintendo Wii and Playstations, the
supplier power is high. The suppliers can negotiate better terms
and high prices which is why the games and software for these
products are expensive. However, if there are a number of
suppliers for a company, their power is limited. Depersio (2018,
p. 14) states that EA has a number of suppliers for its
diversified business which reduces the power of suppliers.
· Buyer power: Since these games fall in the entertainment
category and are luxury products, they are a bit pricey. There is
no established rule or law to control the prices of such games.
This makes the customers pickier about their purchases.
Depersio (2018, p. 12) states that buyers care about the bundle
offers they get and one wrong move of a game developing
company can result in massive losses. According to Depersio
(2018, p. 12), the gaming company Sega had to face this
situation in the case of Dreamcast console which resulted in
massive losses for the company. This shows that buyers want
value for money and hence, the buyer power is high in this
industry.
· Threat of substitutes: There are numerous substitutes for
gaming software and services. Since these fall in the category of
entertainment, people have numerous other options to entertain
themselves. These options include but are not limited to movies,
outdoor games, socializing, and much more. Even within the
gaming domain, there are a number of options available to
people these days. Depersio (2018, p. 13) states that people can
now play app-based games on their smartphones which are very
low in cost compared to video games. Hence, the threat of
substitutes is high.
Competitor analysis
According to Cullen (2019, p.3), Sony is expected to bag a
revenue of $2.8 billion by the end of first quarter of this year.
The company is the maker of Play station which is loved by
gamers all over the world. It has been constantly upgrading the
gaming system over the decades which has not only enhanced
consumer experience but has also made it possible to gain loyal
customers. Another major competitor of Konami is EA sports
which has been a major player in the gaming software industry
for a long time. According to Statista (n.d., p.1), the company
gained a revenue of $5.15 billion in the year 2018. It is
expected to exponentially increase its revenue over the coming
years as well. Blizzard is another major competitor in the
gaming industry and is known for notable games in the past.
The company made a revenue of $7.5 billion in 2018 due to its
innovative products and services. From this information, it can
be analyzed that the company has some serious competitors
globally.
In terms of major games and features, EA is known for
producing The Sims, Need for Speed, FIFA, and Battlefield. All
these games are computer-based and are still played worldwide
by people of all ages. The company produces computer games,
mobile games, and online services for internet-based devices. In
the case of Blizzard, the company is known for high quality
products. It is popular for its game called The Lost Vikings.
Sony is a producer of Playstations which gives it an advantage
in the gaming arena. It produces both hardware and software of
games.
Competitor Profile Matrix
For this matrix, five critical success factors have been chosen.
These factors are chosen on the basis of the industry and the
areas that the companies should be focusing on as a part of their
business. According to Mohan (2018, p. 11), effective
marketing management is a key success factor for a game
development company as it ensures that the target audience is
aware of the new products and services development by the
company and brings more revenue. Companies can make use of
digital marketing in order to reach out to as many people as
possible to increase their customers and become more visible in
the market. In addition to this, the quality of a game and its
architecture is very important for its success. Mohan (2018, p.
16) is of the opinion that a sound gaming architecture ensures
that the game is ready for deployment and gives a clear idea
about the game’s quality. As mentioned in the prior sections, IT
and technological development is crucial for the success of a
gaming industry. Johnson (2018, p. 1) states that the technology
is constantly changing and impacting the gaming industry the
most. This makes IT capabilities an important success factor for
a gaming industry. Given that the competition is high in this
industry, it is important for game developers to retain
customers. One way of doing so is through good customer
service. Ransford (2016, p. 5) cites the results of a report
produced by ‘Econsultancy Multichannel Customer Experience’
which states that gamers value good customer service which is
an effective way to retain them. Hence, customer service is
another critical success factor for companies in this industry.
On the basis of the importance of each critical success factor,
weights have been assigned to them. IT capabilities appear to be
the most crucial area which is why the highest weight of 0.4 is
assigned to it. Marketing management, quality of architecture,
and customer service are equally important, hence, weight of
0.2 is given to each. On the basis of analysis conducted in the
competitor’s section, rating has been allocated to each of these
success factors on the basis of the companies as shown below.
Critical Success Factor
Weight
EA
Blizzard
Sony
Rating
Score
Rating
Score
Rating
Score
Customer service
0.2
2
0.4
1
0.2
3
0.6
IT capabilities
0.4
4
1.2
2
0.6
4
1.2
Marketing Management
0.2
2
0.2
1
0.1
3
0.3
Quality of Architecture
0.2
2
0.4
1
0.2
4
0.8
Total
1
3
1.3
3.7
SWOT Analysis(Partial OT)
Opportunities
· It can expand in the growing markets of Turkey, India, and
other emerging markets.
· It can expand into mobile games segment.
· It can leverage IT advancements to enter segments like VR
and IoT based games
Threats
· Political and economic instability is a major threat to the well-
being of the company.
· Laws revolving around corporate taxation and environment
protection are changing and are a constant threat.
EFE Matrix
Mentioned below is the EFE matrix for Konami. The weight and
rating are assigned according with the significance of each of
the listed factors. For example, for Konami, benefits from IT
advancements are crucial to the growth of the company and
hence, the weight and rating is high. For the company, it is high
time to start investing in the development of games for
smartphones. According to Statista (n.d., p. 2), App store gained
80% and Play store gained 90% of its total revenue in 2016
from gaming applications. In addition to this, Statista (n.d., p.
2) states that there were 2.8 billion average active users each
month on mobile games all over the world. This shows the
potential of mobile gaming apps and the revenue stream that can
be generated from this segment. Based on this information, a
weight of 0.2 has been assigned to this opportunity. As
mentioned in the prior section, IT advancement is bringing more
opportunities for gaming industry and hence, is very important
for its development. A rating of 0.3 is assigned to benefits from
IT advancement accordingly. Hagenmeier (2014, p. 3) states
that emerging markets provide a good opportunity for growth
for the gaming industry and China is a great example of that
given that the country had a size of $20.5 billion in 2013 which
has grown ever since. Therefore, a rating of 0.2 is assigned to
this opportunity.
In terms of threats, political instability is one of the most
significant ones at this time. As explained before, political
instability impacts businesses and since Japan is going through
a power shift at the moment, it is a major threat at this time.
Therefore, a rating of 0.15 has been assigned to this threat. In
the time to come, Japan is going to increase the tax imposed on
corporations which is a big threat to the profitability of
Konami. According to Kyodo (2018, p. 1), the prime minister of
Japan confirmed the intention of a tax hike for the year 2019 in
October 2018. In terms of economy, it is also going through an
uncertain time due to political changes which increases the
threat of an economic downtime. Hence, a rating of 0.1 has been
assigned to it.
Opportunities
Weight
Rating
Total Weighted Score
Expanding smartphone games segment
0.2
2
0.4
Benefits from IT advancement
0.3
3
0.9
Expanding in emerging markets (Turkey, China, India)
0.2
2
0.4
Threats
Political instability
0.15
3
0.45
New taxes on corporations
0.05
2
0.1
Economic downturn
0.10
2
0.2
Total
1
2.45Conclusion
Konami is a significant player in the gaming industry globally.
The company has been operating since 1969 and has a track
record of success over the decades. It faces a lot of competition
in the market as can be seen from the presence of EA, Blizzard,
and Sony as other significant producers of gaming software in
the global gaming industry. The company has several strengths
such as its presence in the market for several decades, loyal
customer base, and good corporate relations with other
companies such as Sony. It also has several weaknesses as well
such as the company’s lack of presence in the mobile gaming
industry. There are numerous opportunities in the global gaming
industry which can be exploited by Konami such as expanding
its presence in emerging markets like Turkey and benefiting
from IT advancements. However, the threats to the company’s
growth are also a lot. For example, the company will face
political instability in 2019 in its country of origin which has
the potential of impacting its revenues. Keeping all this in
mind, it can be safely stated that the company has a bright
future and will stay profitable if it continues to evolve with the
changing times. The company has a diverse portfolio of
products and services within the gaming industry which makes
it stand shoulder to shoulder with EA which is the key
competitor. It is doing well in terms of products and services
when compared with Blizzard but appears to be at the same
level as EA. However, it is lagging behind Sony which not only
produces gaming software but has its own hardware in the form
of gaming consoles. To stay profitable in future, Konami should
focus on new avenues of growth such as expanding to emerging
markets and developing mobile app-based games.
References
Abe says he's going ahead with Japan's consumption tax hike in
October 2019 | The Japan Times. (2018). Retrieved from
https://www.japantimes.co.jp/news/2018/10/15/business/econom
y-business/abe-says-hes-going-ahead-japans-consumption-tax-
hike-october-2019/#.XLYnxSgzY2w
Anderton, K. (2017). The Business Of Video Games: A Multi
Billion Dollar Industry [Infographic]. Retrieved from
https://www.forbes.com/sites/kevinanderton/2017/04/29/the-
business-of-video-games-a-multi-billion-dollar-industry-
infographic/#7d89b2106d27
Buff, C. (2018). How will technology change the future of the
gaming industry?. Retrieved from https://medium.com/buff-
game/how-technology-will-change-the-future-of-the-gaming-
industry-202be868240c
Company Overview of Konami Holdings Corporation. (2019).
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https://www.bloomberg.com/research/stocks/private/snapshot.as
p?privcapId=880912
Cullen, J. (2019). PlayStation sales begin to slow, but Sony still
rules the year in revenue. Retrieved from
https://gamedaily.biz/article/566/playstation-sales-begin-to-
slow-but-sony-still-rules-the-year-in-revenue
Depersio, G. (2018). Porter's Five Forces and Electronic Arts
(EA). Retrieved from
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g-porters-five-forces-electronic-arts-ea.asp
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https://www.statista.com/statistics/269696/revenue-of-
electronic-arts-since-2005/
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HAGENMEIER, J. (2014). Invest In Video Gaming: A Booming
Industry In Emerging Markets - Investing & Day Trading
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industry-emerging-markets/
Jha, B. (2017). How Does New Technology Impact The Gaming
Industry?. Retrieved from
https://www.gamasutra.com/blogs/BinayJha/20170221/291980/
How_Does_New_Technology_Impact_The_Gaming_Industry.ph
p
Johnson, Z. (2018). 5 Ways Technology And AI Are Changing
The Gaming Industry. Retrieved from
https://www.smartdatacollective.com/ways-technology-ai-
changing-gaming-industry/
Mohan, N. (2018). The Complete List of Critical Success
Factors For Gaming Producers. Retrieved from
https://www.saviom.com/blog/complete-list-of-critical-success-
factors-gaming-producers/
Osaki, T. (2019). Japan already in for politically hectic 2019,
but may see 'double election' | The Japan Times. Retrieved from
https://www.japantimes.co.jp/news/2019/01/02/national/politics
-diplomacy/japan-already-politically-hectic-2019-may-see-
double-election/#.XLYqsSgzY2x
Sumikura, I., & Osborn, D. (1998). A BRIEF HISTORY OF
JAPANESE ENVIRONMENTAL ADMINISTRATION: A
QUALIFIED SUCCESS STORY?. Journal Of Environmental
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Region & Segment | Newzoo. Retrieved from
https://newzoo.com/insights/articles/global-games-market-
reaches-137-9-billion-in-2018-mobile-games-take-half/
Writing-Up Your Research Paper
Dr. Kandida Purnell
City, University of London
[email protected]
The plan (roughly):
Abstract:
Introduction:
Introduce research question/s
Set the scene (context: empirical and academic)
Provide summary of what’s to come
Literature Review (/Theoretical Framework):
What are the key academic debates in this area?
What are the key concepts in the literature and how are they
understood?
What are the key theories in the literature that are informing
your research?
Methodology (theory that guides method):
Research Design: What are you going to do? Why?
Research Method/s: HOW will you do it? Detailed
explanation/justification
Shortcomings/potential drawbacks? Room for improvement?
Discussion/Analysis:
What did you find out?
Finding:
How does this respond to your research Qu?
How does this relate to the literature/theories?
Conclusion:
Bibliography (does not count towards word count)
Appendixes (do not count towards word count)
Writing the Abstract
An abstract is a condensed summary of your work that is placed
at the beginning of a paper.
Length: about 200 words.
Four key pieces of information:
a statement of the research question;
the relevance or importance of the research question;
the methods used to answer the research question;
the research paper’s overall conclusions.
Abstract example 1
Grieving, Valuing, and Viewing Differently: The Global War on
Terror’s American Toll
Abstract example 2
Body Politics and Boundary Work: Nobodies on Hunger Strike
at Guantanamo (2013-2015)
Writing the Introduction
Motivation for the project:
So what? What is the point of the research? Why should anyone
care? Introduction should capture the reader’s interest
Empirical scene setting: WHY so interesting?
Academic scene setting: THE GAP
A HOOK to draw/drag your readers in…
SELL SELL SELL!!
Writing the Intro: ‘the hook’
Writing the Intro: ‘the hook’
Writing the Introduction
Introduce the research question
Asking XXXXXXXX? In this research paper …..
In this research paper I respond to the question XXXXXX? By
………
With the question XXXXXXXX? driving this project, research
detailed in the following pages involves….
Writing the intro
Democracy
Terrorism
Security
Ideology
The State
Human Rights
Anarchy
Gender
War
Equality
Capitalism
Introduce and UNPACK your key concepts
Concepts are ESSENTIALLY CONTESTED
Do not assume your readers know how you are using your key
concepts
UNPACK THEM (tell the reader how YOU understand your key
concepts)
Writing the Introduction
Solution
Summarise your methodology:
Research design
Research methods
Findings
A research paper (or essay for that matter) is not a mystery
novel; do not keep your audience guessing as to what the
takeaway message will be.
by providing some conclusions up front, someone who reads
your paper will be able to understand how you reached your
conclusions much more effectively
Abstract / Intro
Yes they do a lot of the same thing
Do not worry about repetition
Abstract is much shorter
Abstract is what people read online BEFORE clicking into the
main article PDF
Have to ‘sell’ the article so people then download-read the
whole thing
Writing up your
Literature Review
Objective of a Literature Review
It helps situate a study within the context of the literature itself.
It establishes credibility of the researcher as an expert in the
field.
Structure and Style
The researcher must synthesize the literature in a concise,
useful way to demonstrate mastery of the subject at hand.
Remember that lit review should give the reader an overview of
the debates and discussions your research will intervene into /
build on
Use subheadings: e. theory section/s could make reference to
existing theories that help provide the framework for your
research
Writing up your
Methodology
The methodology section in a research paper briefly outlines the
researcher’s approach to research/responding to the research
question/s.
Research Design: What kind of a project is this?
Research Method/s:
You should discuss the specific research method/s you have
used IN DETAIL
JUSTIFY YOUR CHOICES IN WRITING
Whether quantitative or qualitative methods used should be
outlined in this section.
Case-Study Justification
You should discuss which cases you selected for your study and
how these were selected.
Potential drawbacks/room for improvement
Acknowledge your research design and methods’ weaknesses in
light of limitations/barriers you faced.
Writing up your
Methodology
Research Design: What kind of a project is this?
Research design (re-cap) = The overall strategy you will employ
to investigate your argument
Types of research design:
Experimentation
Observation
Case Studies:
Single Case Study
Comparative Case Studies
‘Large N’ quantitative design
Writing up your Methodology
Surveys
Interviews
Focus Groups
Ethnography
Participant Observation
Archival Research
Textual Analysis:
Content Analysis
Discourse Analysis
Statistical Analysis
Research Method/s:
You should discuss the specific research methods you have used
IN DETAIL
Justify your choices IN WRITING
16
Writing up your Methodology
Did you take a qual or quant approach? Or a mix? Why? How?
Quantitative research refers to research using numbers, and
qualitative research refers to that which does not use numbers.
Quantitative and qualitative research are not in opposition to
one another. Rather, they can complement each other.
Writing up your
Methodology
Case-Study Justification
You should discuss which cases you selected for your study and
how these were selected.
What is a case ?
A conflict
An event
A country
A region
A city
A political party
A social movement
A terrorist group
A person
Writing up your
Methodology
Case-Study Selection
Random
Typical or Extreme/Deviant?
Influential?
Hard or Easy?
Diverse?
Most similar or most different?
EXPLAIN & JUSTIFY
Writing up your Discussion
Your discussion is where you discuss your findings
Not all of them
Be selective
What were the most interesting and/or surprising things you
found out?
How to present your findings
You should avoid using the word “prove” in your writing.
Often better to use phrases such as “the results suggest” or “the
findings imply”
Writing up your Discussion
How to present your findings
You should avoid using the word “prove” in your writing.
Often better to use phrases such as “this suggests” or “the
finding implies”
REFER BACK TO THE LITERARURE introduced in Lit
Review
Make it plain HOW your findings draw and build on the
debates, theories, and arguments introduced in the Lit Review
Make it plain HOW your findings change/update what we know
about XXX place/event/thing
This is where you detail your CONTRIBUTIONS TO
KNOWLEDGE
Writing up your Discussion
Negative findings (evidence does not support theory)
A negative finding may be disappointing, but it is still a finding
Discuss reasons for which your findings may have gone
contrary to expectation and to engage in ex post theorizing if
you believe your theory needs revision.
Writing up your Conclusion
Refer back to the research question.
Now that you have completed your research, how well have you
addressed your issue? Reiterate whether you were able to
support your hypotheses with the data you collected and
analyzed
Summarize the main findings
Writing up your Conclusion
Acknowledge your project’s limitations and weaknesses
Provide the reader an idea of how the re- search could have
been improved and whether new questions based on the re-
search findings have emerged.
In hindsight should you have used a different method, used
different tools or adopted a different form of analysis? You will
be credited for your perception and understanding in the
examiner’s marking.
Writing up your Conclusion
Generalization
Discuss how the findings from the research can be generalized
to other cases.
SELL SELL SELL!!
The last word(s)
Overall significance?
Questions raised?
Avenues opened up for further research?
Writing Up Your Conclusion (Thomas 2016)
Writing Tips
The “I” Debate: can I write in first person?
YES
Most often a researcher will use the first person in specific
sections of a research report, such as the introduction, theory
and hypotheses, methods and data, or results and discussion.
Writing Sequence
Researchers do not write their papers in order from the abstract
to the conclusion.
the introduction to the paper should among the last sections to
be written for a paper, after the re- search is complete and the
researcher knows exactly what the paper’s conclusions are.
Appendix?
Some of you will have appendixes
Some of you won’t
Remember: carries no word count so use to your advantage
Appendix items may include:
Interview transcripts (coded)
Texts analyzed (coded)
Full list of participants
Full category/coding list
Full list of sites (if ethnography
ANY QUESTIONS??????
The plan (roughly): NOW WITH APPROX WORD COUNTS!!!
Abstract: 200ish (does not count towards word count)
Introduction: 500 max
Introduce research question/s
Set the scene (context: empirical and academic)
Provide summary of what’s to come
Literature Review (/Theoretical Framework): 1,000ish
What are the key academic debates in this area?
What are the key concepts in the literature and how are they
understood?
What are the key theories in the literature that are informing
your research?
Methodology (theory that guides method): 750-1,000
Research Design: What are you going to do? Why?
Research Method/s: HOW will you do it? Detailed
explanation/justification
Shortcomings/potential drawbacks? Room for improvement?
Discussion/Analysis: 1,000-1,500ish
What did you find out?
Finding:
How does this respond to your research Qu?
How does this relate to the literature/theories?
Conclusion: 500 max
Bibliography (does not count towards word count)
Appendixes (do not count towards word count)
One issue you will need to define is how you will evaluate
whether it’s good/positive to decrease the voting age? Is it the
quality of democracy, economic prosperity or something else?
In essence, what kind of positive observable outcomes we
expect to see to prove that decreasing the voting age is positive?
These are some questions
· When is a convenient time to start one it’s voting career?
· Is it a matter of age the interest for political life?
· Which might lead to an uninformed vote choice? (The lack of
political maturity, political interest and political knowledge of
young voters)
· It is higher level of turnout among voters younger than 18
years?
Case Selection: Austrian[1] and Brazil[2] Regional Elections
IP2021 Scholarly Writing: Introduction to Research Design and
Methods
Dr. Kandida Purnell
City University London
[email protected]
Preliminary bits
Moodle sign in:
https://moodle.city.ac.uk/course/view.php?id=31500
2. Community Project Fund:
https://www.citystudents.co.uk/getinvolved/yourcityfund/
Deadline: 27th Jan!!
£500 to do something (eg. event, project) here at City!
IP2021 Scholarly Writing: Introduction to Research Design and
Methods
Dr. Kandida Purnell
City University London
[email protected]
Today
Basics/Course details
Intro to Research
Key debates:
Qualitative vs Qualitative?
Positivist Vs Post-positivist
Your first task
*
Warning
This lecture contains the words epistemology, ontology, and
methodology
*
However
I’m assuming NO existing knowledge/experience of research
design and execution
I will be starting from the absolute basics
There are no ‘stupid’ questions
*
BUT
You will NEED to read, this (the core text):
*
Course Convenor
Dr. Kandida Purnell
Email: [email protected]
@KandidaPurnell
D512 Rhind Building
Office hours:
Monday 1430-1630 (DROP IN)
OR book by e-mail for appointments outside of office hours
Some Questions
Where does knowledge come from?
Who are the makers of knowledge?
How is knowledge made?
*
Some Answers
Where does knowledge come from?
Knowledge is produced through research
Who are the makers of knowledge?
Knowledge is produced through research by researchers
How is knowledge made?
Knowledge is produced by researchers through the use of
research methods
*
This course is not about:
Essay writing (you’ve already done/mastered that)
*
This course is about:
Making knowledge by DOING RESEARCH
Becoming an ‘expert’
Developing skills in research design
Understanding epistemology (theory of knowledge) and
ontology (theory of being)
Understanding Methodology: The theory that guides your
method (informed by epistemology and ontology)
Understanding, selecting, and using an appropriate research
method “technique for collecting and analysing data” (Stares,
2010)
*
Welcome to the world of research!!!!!
Essay Writing
Designing and conducting RESEARCH PROJECTS
WRITING RESEARCH PAPERS
WRITING YOUR DISSERTATION
Research beyond the degree: PG or employment
*
What is Research?
*
Going out into the world armed with: a research question and/or
hypothesisKnowledge of what has already been said on the
issue/the key debates (you’ve done a literature review)a
theory/some theories and some key conceptsa methodology (a
theory about method)a/some research method/s*
Coming back to the office and:Analysing your findingsDrawing
conclusionsWriting it up!
WARNING: In reality, research does not normally unfold in this
linear fashion.
RESEARCH METHODS YOU MIGHT
USE:SurveysInterviewsFocus GroupsEthnographyParticipant
ObservationTextual AnalysisCritical Discourse
AnalysisStatistical Analysis
The Research Process (in theory)
Question
Literature Review
Method
Analysis
The Research Process (in reality)
Initial Question
Literature Review
New Question
Method
Analysis
Where does Research come from?
*
Organizations, Institutions, and Companies
including:GovernmentsInternational OrganisationsPolitical
ConsultanciesPolitical PartiesThink tanksCharitiesNon
Governmental Organizations (NGOs)International Non
Governmental Organisations (INGOs)Civil Society
Organizations (CSOs)Universities
Who makes it
*
People including:Policy OfficersResearch OfficersResearch
AssistantsParliamentary AssistantsPolitical AssistantsPolitical
ConsultantsAcademics
(Graduates, people like you!)
Welcome to our world!(Research is what we do when we’re not
teaching!)
*
My Research Background
Research topics:
Global War on Terrorism
War Performance, Commemoration, and Militarism
Bodies, (In)Security, and War
Aid transparency
Green Economy
Research:
Purnell, K. 2018, ‘Grieving, Valuing and Viewing Differently:
The Global War on Terror's American Toll', International
Political Sociology, Vol. 12(2): 156-171. Impact Factor: 1.923.
Purnell, K. and Danilova, N. 2018, ‘Dancing at the Frontline:
Rosie Kay’s 5SOLDIERS De-Realises and Re-Secures the
Global War on Terror’, Critical Studies on Security, Vol. 6(3):
370-375.
Purnell, K. 2015, 'Body Politics and Boundary Work Nobodies
on Hunger Strike at Guantánamo (2013–2015)', Alternatives:
Global, Local, Political, Vol.39 (4): 271-286.
Purnell, K. Forthcoming 2019. ‘Re-thinking the Body in Global
Politics: Bodies, Body Politics, Bodies Politics:’, Routledge
(Interventions series).
Danilova, N. and Purnell, K. Forthcoming 2020, ‘The
‘Museumification’ of the Scottish Soldier and (Re)production of
British Martial Race’, Critical Military Studies.
Bird, J, Lawton, K and Purnell, K. 2010, ‘Green and Decent
Jobs: The case for local action’, Institute for Public Policy
Research.
*
Bringing Bodies Back: The British and American politics of
repatriation and war performance during the Global War on
Terror
How do past and present military/militarised bodies come into
view and make themselves known within the British and
American contexts of the GWoT?
‘Bringing Bodies Back’ contributes to knowledge by
comparatively analyzing/garnering holistic insight into
overarching dynamics, logics, and the implications of bringing
two kinds of bodies back, taking a dual approach by:
Scrutinising the repatriations of British and American soldiers
injured and KIA in conflicts ongoing under the banner of the
GWoT;
2) Exploring British and American public performances and
reenactments of past wars re-embodying experiences of WWI
and the Vietnam War via national Centenary and 50th
Anniversary commemorative effforts and involving Army/Artist
engagement.Comparative case study analysis (US and
UK)Fieldwork/Participant Ethnographies: US and UK
Repatriation and Performance SitesSemi-Structured Interviews
w/Key Stakeholders (Gov, Army, War Photographers, Military
Families, Performers, Audiences, Artists)
*
[email protected] and the Performance of War in Public
*
How does [email protected] work towards engaging performing
artists in the co-production, sanitisation and/or reframing of
narratives relating to war/soldiering, particularly in regards to
embodied gendered, sexualised, racialised experiences?
How does the making visible of particular embodied
experiences of soldiers feed into understandings of the
contemporary British Army and larger geopolitical dynamics at
play, particularly in relations to the visual politics of the
GWoT?
Fieldwork (Fringe Festival)
Participant Auto-Ethnography (Performances)
Semi-Structured Interviews (Choreographers, Army, Audience,
Fringe Organisers)
My Pre-Academic Research Life
*
http://www.publishwhatyoufund.org/the-index/2018 35
indicators to monitor aid transparencyStatistical analysis
http://www.publishwhatyoufund.org/the-index/methodology/
My Pre-Academic Research Life
*
https://www.ippr.org/publications/green-and-decent-jobs-the-
case-for-local-actionEthnographyFocus groupsInterviews
Koen’s Research
The promotion of and resistance to LGBT equality in
international politics.
EU accession of Serbia and how this process affects LGBT
politics and activism.
Power relations within transnational politics and the de-
construction of core-periphery hierarchical relations, with a
specific interest in topics dealing with masculinities and LGBT
issues.
*
"Not 'coming out'? The attitudinal panopticon & the shallow
Europeanisation of LGBT rights in Serbia" Fieldwork
(Serbia/Brussels)Interviews (activists, policy
makers)Ethnography (Pride events)
Leonie’s Research
The role of social movements, civil resistance campaigns and
human rights activism in conflict and peace building.
The Israeli-Palestinian conflict. She aims to understand how
activism itself transforms and how it influences the trajectory of
a conflict or peace process.
*
Negotiating Privilege: The Role of Internal Third-Party
Interveners in Civil Resistance Campaigns: The Case of Israeli
Anti-Occupation Activists.Fieldwork in Israel and
O/TParticipant Ethnographies Informal Interviews
To grow from reader/student to researcher/expert able to:
Design research projects of your ownConduct research and write
up:4,000 word research paper (this course’s requirement)10,000
word dissertation (next year)
Why study research design and methods?
How will I learn?
10 Weekly Lectures
Introduction to the Module
Research Question
Reviewing the Literature
Theory
Concepts
Research Design
Case Selection
Text Analysis
Asking Questions and Research Ethics
How to Write a Research Paper
The core text (Halperin & Heath) + readings on Moodle
Regular meetings with your Advisor:
Allocated on the basis of the topic submitting Jan 25th
Will discuss/advise on your progress throughout the course
How will I be Assessed?
Research Paper
Length: 4,000 words
Deadline: 2 May 2019
100% of the final mark
Research Paper Outline (Basic skeleton, more to follow)
Introduction
Introduce research question/s
Set the scene (context: empirical and academic)
Provide summary of what’s to come
Literature Review/Theoretical Framework
What has everyone else in academia already said?
What are the key academic debates in this area?
What are the key theories informing your project
What are the key concepts you will be working with?
Methodology
Research Method/s
Discussion/Analysis
Conclusions
Bibliography
Appendixes
This is also the general form your dissertations will take next
time
RESEARCH METHODS YOU MIGHT
USE:SurveysInterviewsFocus GroupsEthnographyParticipant
ObservationTextual AnalysisCritical Discourse
AnalysisStatistical Analysis
A note on ‘Quantitative vs. Qualitative’ Research
Quantitative research refers to research using numbers, and
qualitative research refers to that which does not use numbers.
Quantitative and qualitative research are not in opposition to
one another. Rather, they can complement each other.
The rift is largely artificial and receding (eg. 5 interviews)
On Research/ingHow to make knowledge about politics and
international relations?Key debate: Positivism vs Post-
Positivism
Where you sit on this will determine the type of questions you
ask and your entire approach as a researcher…
Positivism
Knowledge about the social/political world can be obtained
objectively
The things comprising the social/political world can be
observed, measured and studied ‘scientifically’
Comte (1848): Social matters can be studied in the same way
that scientists studied physics and chemistry where there had
been such success with scientific method (‘Enlightenment’)
WHY?? Positivist Epistemology and Ontology
Epistemology: Theory of knowledge.
Positivist Epistemology: There is knowledge out there a priori
to the researcher. We just have to uncover/get to know it,
through our research.
Ontology: Theory of things that have being/exist.
There are lots of things that have being in the social/political
world eg. Terrorism, Democracy. These exist a priori to the
researcher who needs only to find, measure, count, and
accurately describe these things through their research.
HOW?? Positivism
Key principles:
Generalization/Grand Theories: Aim at explain and predict
social phenomena by discovering empirical regularities,
formulating law-like generalizations and establishing causal
relationships.
Eg. Realism and ‘Balance of Power’ theory
Eg. Liberalism and ‘Democratic Peace’ theory
Empirical Verification: statements can be believed & accepted
to the extent that they are derived from empirical evidence
Values: aspiration/claim to value-free form of enquiry.
RESEARCH METHODS A POSITIVIST MIGHT
USE:SurveysInterviewsFocus GroupsEthnographyParticipant
ObservationTextual AnalysisCritical Discourse
AnalysisStatistical Analysis
Post-Positivism (‘interpretivism’)
Critique of Positivism:
Nowhere in social sciences do we find empirical generalizations
with the level of precision and confirmation enjoyed by
‘natural’ sciences.
The social/political world is not straightforwardly perceivable
because we are a part of it. It’s not simply ‘out there’; it is
different for each of us, with things, words, and events carrying
different meanings in every case (we are in it).
Arguments:
Human action (social and political phenomenon included) can
only be interpreted from the point of view of the actors.
It cannot therefore be adequately studied using the methods of
‘hard’ sciences, with talk of variables and quantification.
WHY?? Post-Positivist Epistemology and Ontology
Epistemology: Theory of knowledge.
Knowledge is imbued with power (Power/Knowledge) and
inherently political.
There is no clear, disinterested knowledge – people have
experiences, feelings, and understandings that effect the ways
that they perceive and interpret the world. Not only is it
impossible to eliminate these but they are the stuff out of which
the world is made.
Ontology: Theory of things that have being/exist.
Things come into being and are known as such as a result of
operations of power.
HOW?? Post-Positivism (‘interpretivism’)
Key principles:
interested in people and the way that they interrelate – what
they think and how they form ideas about the world; how their
worlds are constructed.
not be trying to be objective or ‘neutral’; rather, you will be
accepting the centrality of subjectivity.
RESEARCH METHODS A POST-POSITIVIST MIGHT
USE:SurveysInterviewsFocus GroupsEthnographyParticipant
ObservationTextual AnalysisCritical Discourse
AnalysisStatistical Analysis
Your First Task
Decide on a broad research topic
Write a few sentences on what interests you about it
Upload this to Moodle by Friday (25th Jan) at 4pm
Some Research Topics
Voting behavior
Social movements
Climate Change
Governance
War (past or present)
Terrorism
Counterterrorism
Democracy
International Institutions
Security
International Trade
International Finance
Financial Crisis
Militarism
Human Rights
*
Task for next week (Formulating a Research Question w/Stefano
P)
Start brainstorming research questions
Open a word document and jot them down every time you think
of one
Any Questions?
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1
This text was adapted by The Saylor Foundation under a
Creative
Commons Attribution-NonCommercial-ShareAlike 3.0 License
without
attribution as requested by the work’s original creator or
licensee.
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Preface
Teaching strategic management classes can be a very difficult
challenge for professors. In most
business schools, strategic management is a “capstone” course
that requires students to draw on
insights from various functional courses they have completed
(such as marketing, finance, and
accounting) to understand how top executives make the strategic
decisions that drive whether
organizations succeed or fail. Many students have very little
experience with major organizational
choices. This undermines many students’ engagement in the
course.
Our book is designed to enhance student engagement. A good
product in any industry matches what
customers want and need, and the textbook industry is no
exception. It is well documented that
many of today’s students are visual learners. To meet students’
wants and needs (and thereby create
a much better teaching experience for professors), our book
offers the following:
• Several graphic displays in each chapter that summarize key
concepts in a visually
appealing format.Chapter 1 "Mastering Strategy: Art and
Science", for example, offers graphic
displays on (1) the “5 Ps” of strategy; (2) intended, emergent,
and realized strategies; (3) strategy in
ancient times; (4) military strategy; and (5) the evolution of
strategic management as a field of study.
The idea for the graphic displays was inspired by the visually
rich and popular series on business
published by DK Publishing.
• Rich, illustrative examples drawn from companies that are
relevant to many
students. As part of our emphasis on examples, each chapter
uses one company as an ongoing
example to bring various concepts to life. In Chapter 1
"Mastering Strategy: Art and Science", Apple is
used as the ongoing example.
• A “strategy at the movies” feature in each chapter that links
course concepts with a
popular motion picture. In Chapter 1 "Mastering Strategy: Art
and Science", for example, we
describe how The Social Network illustrates intended,
emergent, and realized strategies.
Politicians in many states are paying more and more attention
over time to the cost of a college
education, including the high prices of most textbooks. It is
therefore reasonable to expect an ever-
increasing number of professors to seek modestly priced
textbooks. Professors still want to be
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assured of quality, of course. Both of us are endowed chairs at
Research I universities. We have long
track records of publishing our research in premier journals, and
we have served in a variety of
editorial and review board roles for such journals. Finally, we
recognize that professors want to
minimize their switching costs when adopting a new book.
Although every textbook is a little unique,
our table of contents offers a structure and topic coverage that
parallels what market leading books
provide.
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Chapter 1
Mastering Strategy: Art and Science
L E A R N I N G O B J E C T I V E S
After reading this chapter, you should be able to understand and
articulate answers to the following
questions:
1. What are strategic management and strategy?
2. Why does strategic management matter?
3. What elements determine firm performance?
Strategic Management: A Core Concern for Apple
The Opening of the Apple Store
Image courtesy of Neil Bird,
http://www.flickr.com/photos/nechbi/2058929337.
March 2, 2011, was a huge day for Apple. The firm released its
much-anticipated iPad2, a thinner and
faster version of market-leading Apple’s iPad tablet device.
Apple also announced that a leading publisher,
Random House, had made all seventeen thousand of its books
available through Apple’s iBookstore.
Apple had enjoyed tremendous success for quite some time.
Approximately fifteen million iPads were sold
in 2010, and the price of Apple’s stock had more than tripled
from early 2009 to early 2011.
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But future success was far from guaranteed. The firm’s
visionary founder Steve Jobs was battling serious
health problems. Apple’s performance had suffered when an
earlier health crisis had forced Jobs to step
away from the company. This raised serious questions. Would
Jobs have to step away again? If so, how
might Apple maintain its excellent performance without its
leader?
Meanwhile, the iPad2 faced daunting competition. Samsung,
LG, Research in Motion, Dell, and other
manufacturers were trying to create tablets that were cheaper,
faster, and more versatile than the iPad2.
These firms were eager to steal market share by selling their
tablets to current and potential Apple
customers. Could Apple maintain leadership of the tablet
market, or would one or more of its rivals
dominate the market in the years ahead? Even worse, might a
company create a new type of device that
would make Apple’s tablets obsolete?
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1.1 Defining Strategic Management and Strategy
L E A R N I N G O B J E C T I V E S
1. Learn what strategic management is.
2. Understand the key question addressed by strategic
management.
3. Understand why it is valuable to consider different
definitions of strategy.
4. Learn what is meant by each of the 5 Ps of strategy.
What Is Strategic Management?
Issues such as those currently faced by Apple are the focus of
strategic management because they help
answer the key question examined by strategic management—
“Why do some firms outperform other
firms?” More specifically, strategic management examines how
actions and events involving top
executives (such as Steve Jobs), firms (Apple), and industries
(the tablet market) influence a firm’s
success or failure. Formal tools exist for understanding these
relationships, and many of these tools are
explained and applied in this book. But formal tools are not
enough; creativity is just as important to
strategic management. Mastering strategy is therefore part art
and part science.
This introductory chapter is intended to enable you to
understand what strategic management is and why
it is important. Because strategy is a complex concept, we begin
by explaining five different ways to think
about what strategy involves (Figure 1.1 "Defining Strategy:
The Five Ps"). Next, we journey across many
centuries to examine the evolution of strategy from ancient
times until today. We end this chapter by
presenting a conceptual model that maps out one way that
executives can work toward mastering
strategy. The model also provides an overall portrait of this
book’s contents by organizing the remaining
nine chapters into a coherent whole.
Defining Strategy: The Five Ps
Defining strategy is not simple. Strategy is a complex concept
that involves many different processes and
activities within an organization. To capture this complexity,
Professor Henry Mintzberg of McGill
University in Montreal, Canada, articulated what he labeled as
“the 5 Ps of strategy.” According to
Mintzberg, understanding how strategy can be viewed as a plan,
as a ploy, as a position, as a pattern, and
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as a perspective is important. Each of these five ways of
thinking about strategy is necessary for
understanding what strategy is, but none of them alone is
sufficient to master the concept. [1]
Figure 1.1 Defining Strategy: The Five Ps
Images courtesy of Thinkstock (first); Dave, K., Short, J.,
Combs, J., & Terrell, W. (2011). Tales of
Garcón: The Franchise Players. Irvington, Wikipedia (third);
Old Navy (fourth); James Duncan
Davidson from Portland, USA (fifth).
Strategy as a Plan
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Strategic plans are the essence of strategy, according to one
classic view of strategy. A strategic plan is a
carefully crafted set of steps that a firm intends to follow to be
successful. Virtually every organization
creates a strategic plan to guide its future. In 1996, Apple’s
performance was not strong, and Gilbert F.
Amelio was appointed as chief executive officer in the hope of
reversing the company’s fortunes. In a
speech focused on strategy, Amelio described a plan that
centered on leveraging the Internet (which at the
time was in its infancy) and developing multimedia products
and services. Apple’s subsequent success
selling over the Internet via iTunes and with the iPad can be
traced back to the plan articulated in 1996. [2]
A business model should be a central element of a firm’s
strategic plan. Simply stated, a business model
describes the process through which a firm hopes to earn
profits. It probably won’t surprise you to learn
that developing a viable business model requires that a firm sell
goods or services for more than it costs
the firm to create and distribute those goods. A more subtle but
equally important aspect of a business
model is providing customers with a good or service more
cheaply than they can create it themselves.
Consider, for example, large chains of pizza restaurants such as
Papa John’s and Domino’s.
Franchises such as Pizza Hut provide an example of a popular
business model that has been successful worldwide.
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Image courtesy of Derek Jensen,
http://wikimediafoundation.org/wiki/File:Bremen-indiana-pizza-
hut.jpg.
Because these firms buy their ingredients in massive quantities,
they pay far less for these items than any
family could (an advantage called economies of scale).
Meanwhile, Papa John’s and Domino’s have
developed specialized kitchen equipment that allows them to
produce better-tasting pizza than can be
created using the basic ovens that most families rely on for
cooking. Pizza restaurants thus can make
better-tasting pizzas for far less cost than a family can make
itself. This business model provides healthy
margins and has enabled Papa John’s and Domino’s to become
massive firms.
Strategic plans are important to individuals too. Indeed, a well-
known proverb states that “he who fails to
plan, plans to fail.” In other words, being successful requires a
person to lay out a path for the future and
then follow that path. If you are reading this, earning a college
degree is probably a key step in your
strategic plan for your career. Don’t be concerned if your plan
is not fully developed, however. Life is full
of unexpected twists and turns, so maintaining flexibility is
wise for individuals planning their career
strategies as well as for firms.
For firms, these unexpected twists and turns place limits on the
value of strategic planning. Former
heavyweight boxing champion Mike Tyson captured the
limitations of strategic plans when he noted,
“Everyone has a plan until I punch them in the face.” From that
point forward, strategy is less about a
plan and more about adjusting to a shifting situation. For firms,
changes in the behavior of competitors,
customers, suppliers, regulators, and other external groups can
all be sources of a metaphorical punch in
the face. As events unfold around a firm, its strategic plan may
reflect a competitive reality that no longer
exists. Because the landscape of business changes rapidly, other
ways of thinking about strategy are
needed.
Strategy as a Ploy
A second way to view strategy is in terms of ploys. A strategic
ploy is a specific move designed to outwit or
trick competitors. Ploys often involve using creativity to
enhance success. One such case involves the
mighty Mississippi River, which is a main channel for shipping
cargo to the central portion of the United
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States. Ships traveling the river enter it near New Orleans,
Louisiana. The next major port upriver is
Louisiana’s capital, Baton Rouge. A variety of other important
ports exist in states farther upriver.
Many decades ago, the governor of Louisiana was a clever and
controversial man named Huey Long.
Legend has it that Long ordered that a bridge being constructed
over the Mississippi River in Baton Rouge
be built intentionally low to the ground. This ploy created a
captive market for cargo because very large
barges simply could not fit under the bridge. Large barges using
the Mississippi River thus needed to
unload their cargo in either New Orleans or Baton Rouge. Either
way, Louisiana would benefit. Of course,
owners of ports located farther up the river were not happy.
Ploys can be especially beneficial in the face of much stronger
opponents. Military history offers quite a
few illustrative examples. Before the American Revolution, land
battles were usually fought by two
opposing armies, each of which wore brightly colored clothing,
marching toward each other across open
fields. George Washington and his officers knew that the United
States could not possibly defeat better-
trained and better-equipped British forces in a traditional battle.
To overcome its weaknesses, the
American military relied on ambushes, hit-and-run attacks, and
other guerilla moves. It even broke an
unwritten rule of war by targeting British officers during
skirmishes. This was an effort to reduce the
opponent’s effectiveness by removing its leadership.
Centuries earlier, the Carthaginian general Hannibal concocted
perhaps the most famous ploy ever.
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Hannibal’s clever use of elephants to cross the Alps provides an
example of a strategic ploy.
Image courtesy of Wikipedia,
http://en.wikipedia.org/wiki/File:Hannibal3.jpg.
Carthage was at war with Rome, a scary circumstance for most
Carthaginians given their far weaker
fighting force. The Alps had never been crossed by an army. In
fact, the Alps were considered such a
treacherous mountain range that the Romans did not bother
monitoring the part of their territory that
bordered the Alps. No horse was up to the challenge, but
Hannibal cleverly put his soldiers on elephants,
and his army was able to make the mountain crossing. The
Romans were caught completely unprepared
and most of them were frightened by the sight of charging
elephants. By using the element of surprise,
Hannibal was able to lead his army to victory over a much more
powerful enemy.
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Ploys continue to be important today. In 2011, a pizzeria owner
in Pennsylvania was accused of making a
rather unique attempt to outmaneuver two rival pizza shops.
According to police, the man tried to
sabotage his competitors by placing mice in their pizzerias. If
the ploy had not been discovered, the two
shops could have suffered bad publicity or even been shut down
by authorities because of health concerns.
Although most strategic ploys are legal, this one was not, and
the perpetrator was arrested. [3]
Strategy as a Pattern
Strategy as pattern is a third way to view strategy. This view
focuses on the extent to which a firm’s actions
over time are consistent. A lack of a strategic pattern helps
explain why Kmart deteriorated into
bankruptcy in 2002. The company was started in the late
nineteenth century as a discount department
store. By the middle of the twentieth century, consistently
working to be good at discount retailing had led
Kmart to become a large and prominent chain.
By the 1980s, however, Kmart began straying from its
established strategic pattern. Executives shifted the
firm’s focus away from discount retailing and toward
diversification. Kmart acquired large stakes in
chains involved in sporting goods (Sports Authority), building
supplies (Builders Square), office supplies
(OfficeMax), and books (Borders). In the 1990s, a new team of
executives shifted Kmart’s strategy again.
Brands other than Kmart were sold off, and Kmart’s strategy
was adjusted to emphasize information
technology and supply chain management. The next team of
executives decided that Kmart’s strategy
would be to compete directly with its much-larger rival,
Walmart. The resulting price war left Kmart
crippled. Indeed, this last shift in strategy was the fatal mistake
that drove Kmart into bankruptcy. Today,
Kmart is part of Sears Holding Company, and its prospects
remain uncertain.
In contrast, Apple is very consistent in its strategic pattern: It
always responds to competitive challenges
by innovating. Some of these innovations are complete busts.
Perhaps the best known was the Newton, a
tablet-like device that may have been ahead of its time. Another
was the Pippin, a video game system
introduced in 1996 to near-universal derision. Apple TV, a 2007
offering intended to link televisions with
the Internet, also failed to attract customers. Such failures do
not discourage Apple, however, and enough
of its innovations are successful that Apple’s overall
performance is excellent. However, there are risks to
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following a pattern too closely. A consistent pattern can make a
company predictable, a possibility that
Apple must guard against in the years ahead.
Strategy as a Position
Viewing strategy as a plan, a ploy, and a pattern involve only
the actions of a single firm. In contrast, the
next P—strategy as position—considers a firm and its
competitors. Specifically, strategy as position refers
to a firm’s place in the industry relative to its competitors.
McDonald’s, for example, has long been and
remains the clear leader among fast-food chains. This position
offers both good and bad aspects for
McDonald’s. One advantage of leading an industry is that many
customers are familiar with and loyal to
leaders. Being the market leader, however, also makes
McDonald’s a target for rivals such as Burger King
and Wendy’s. These firms create their strategies with
McDonald’s as a primary concern. Old Navy offers
another example of strategy as position. Old Navy has been
positioned to sell fashionable clothes at
competitive prices.
Old Navy occupies a unique position as the low-cost strategy
within the Gap Inc.’s fleet of brands.
Image courtesy of Lindsey Turner,
http://www.flickr.com/photos/theogeo/2148416495.
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Old Navy is owned by the same corporation (Gap Inc.) as the
midlevel brand the Gap and upscale brand
Banana Republic. Each of these three brands is positioned at a
different pricing level. The firm hopes that
as Old Navy’s customers grow older and more affluent, they
will shop at the Gap and then eventually at
Banana Republic. A similar positioning of different brands is
pursued by General Motors through its
Chevrolet (entry level), Buick (midlevel), and Cadillac
(upscale) divisions.
Firms can carve out a position by performing certain activities
in a different manner than their rivals. For
example, Southwest Airlines is able to position itself as a
lower-cost and more efficient provider by not
offering meals that are common among other airlines. In
addition, Southwest does not assign specific
seats. This allows for faster loading of passengers. Positioning a
firm in this manner can only be
accomplished when managers make trade-offs that cut off
certain possibilities (such as offering meals and
assigned seats) to place their firms in a unique strategic space.
When firms position themselves through
unique goods and services customers value, business often
thrives. But when firms try to please everyone,
they often find themselves without the competitive positioning
needed for long-term success. Thus
deciding what a firm is not going to do is just as important to
strategy as deciding what it is going to do. [4]
To gain competitive advantage and greater success, firms
sometimes change positions. But this can be a
risky move. Winn-Dixie became a successful grocer by
targeting moderate-income customers. When the
firm abandoned this established position to compete for
wealthier customers and higher margins, the
results were disastrous. The firm was forced into bankruptcy
and closed many stores. Winn-Dixie
eventually exited bankruptcy, but like Kmart, its future
prospects are unclear. In contrast to firms such as
Winn-Dixie that change positions, Apple has long maintained a
position as a leading innovator in various
industries. This positioning has served Apple well.
Strategy as a Perspective
The fifth and final P shifts the focus to inside the minds of the
executives running a
firm. Strategy as perspective refers to how executives interpret
the competitive landscape around them.
Because each person is unique, two different executives could
look at the same event—such as a new
competitor emerging—and attach different meanings to it. One
might just see a new threat to his or her
firm’s sales; the other might view the newcomer as a potential
ally.
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An old cliché urges listeners to “make lemons into lemonade.”
A good example of applying this idea
through strategy as perspective is provided by local government
leaders in Sioux City, Iowa. Rather than
petition the federal government to change their airport’s
unusual call sign—SUX—local leaders decided to
leverage the call sign to attract the attention of businesses and
tourists to build their city’s economic base.
An array of clothing and other goods sporting the SUX name is
available at http://www.flysux.com. Some
strategists such as these local leaders are willing to take a
seemingly sour situation and see the potential
sweetness, while other executives remain fixated on the
sourness.
Executives who adopt unique and positive perspectives can lead
firms to find and exploit opportunities
that others simply miss. In the mid-1990s, the Internet was
mainly a communication tool for academics
and government agencies. Jeff Bezos looked beyond these
functions and viewed the Internet as a potential
sales channel. After examining a number of different markets
that he might enter using the Internet,
Bezos saw strong profit potential in the bookselling business,
and he began selling books online. Today,
the company he created—Amazon—has expanded far beyond its
original focus on books to become a
dominant retailer in countless different markets. The late Steve
Jobs at Apple appeared to take a similar
perspective; he saw opportunities where others could not, and
his firm has reaped significant benefits as a
result.
K E Y T A K E A W A Y
• Strategic management focuses on firms and the different
strategies that they use to become and remain
successful. Multiple views of strategy exist, and the 5 Ps
described by Henry Mintzberg enhance
understanding of the various ways in which firms conceptualize
strategy.
E X E R C I S E S
1. Have you developed a strategy to manage your career?
Should you make it more detailed? Why or why
not?
2. Identify an example of each of the 5 Ps of strategy other than
the examples offered in this section.
3. What business that you visit regularly seems to have the most
successful business model? What makes
the business model work?
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[1] Mintzberg, H. 1987. The strategy concept I: Five Ps for
strategy. California Management Review, 30(1), 11–24.
[2] Markoff, J. 1996, May 14. Apple unveils strategic plan of
small steps. New York Times. Retrieved
from http://www.nytimes.com/1996/05/14/business/apple-
unveils-strategic -plan-of-small-steps.html
[3] Reuters. 2011, March 1. Philadelphia area pizza owner used
mice vs. competition—police. Retrieved from
news.yahoo.com/s/nm/20110301/od_uk_nm/oukoe_uk_crime_pi
zza
[4] Porter, M. E. 1996, November–December. What is strategy?
Harvard Business Review, 61–79.
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1.2 Intended, Emergent, and Realized Strategies
L E A R N I N G O B J E C T I V E S
1. Learn what is meant by intended and emergent strategies and
the differences between them.
2. Understand realized strategies and how they are influenced
by intended, deliberate, and emergent
strategies.
A few years ago, a consultant posed a question to thousands of
executives: “Is your industry facing
overcapacity and fierce price competition?” All but one said
“yes.” The only “no” came from the
manager of a unique operation—the Panama Canal! This
manager was fortunate to be in charge of a
venture whose services are desperately needed by shipping
companies and that offers the only simple
route linking the Atlantic and Pacific Oceans. The canal’s
success could be threatened if transoceanic
shipping was to cease or if a new canal were built. Both of these
possibilities are extremely remote,
however, so the Panama Canal appears to be guaranteed to have
many customers for as long as
anyone can see into the future.
When an organization’s environment is stable and predictable,
strategic planning can provide
enough of a strategy for the organization to gain and maintain
success. The executives leading the
organization can simply create a plan and execute it, and they
can be confident that their plan will
not be undermined by changes over time. But as the consultant’s
experience shows, only a few
executives—such as the manager of the Panama Canal—enjoy a
stable and predictable situation.
Because change affects the strategies of almost all
organizations, understanding the concepts of
intended, emergent, and realized strategies is important (Figure
1.2 "Strategic Planning and
Learning: Intended, Emergent, and Realized Strategies"). Also
relevant are deliberate and
nonrealized strategies. The relationships among these five
concepts are presented in Figure 1.3 "A
Model of Intended, Deliberate, and Realized Strategy". [1]
Figure 1.2 Strategic Planning and Learning: Intended,
Emergent, and Realized Strategies
Intended and Emergent Strategies
Figure 1.3 A Model of Intended, Deliberate, and Realized
Strategy
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Reproduced with permission
An intended strategy is the strategy that an organization hopes
to execute. Intended strategies are usually
described in detail within an organization’s strategic plan.
When a strategic plan is created for a new
venture, it is called a business plan. As an undergraduate
student at Yale in 1965, Frederick Smith had to
complete a business plan for a proposed company as a class
project. His plan described a delivery system
that would gain efficiency by routing packages through a central
hub and then pass them to their
destinations. A few years later, Smith started Federal Express
(FedEx), a company whose strategy closely
followed the plan laid out in his class project. Today, Frederick
Smith’s personal wealth has surpassed $2
billion, and FedEx ranks eighth among the World’s Most
Admired Companies according
to Fortune magazine. Certainly, Smith’s intended strategy has
worked out far better than even he could
have dreamed.[2]
Emergent strategy has also played a role at Federal Express. An
emergent strategy is an unplanned
strategy that arises in response to unexpected opportunities and
challenges. Sometimes emergent
strategies result in disasters. In the mid-1980s, FedEx deviated
from its intended strategy’s focus on
package delivery to capitalize on an emerging technology:
facsimile (fax) machines. The firm developed a
service called ZapMail that involved documents being sent
electronically via fax machines between FedEx
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offices and then being delivered to customers’ offices. FedEx
executives hoped that ZapMail would be a
success because it reduced the delivery time of a document from
overnight to just a couple of hours.
Unfortunately, however, the ZapMail system had many technical
problems that frustrated customers.
Even worse, FedEx failed to anticipate that many businesses
would simply purchase their own fax
machines. ZapMail was shut down before long, and FedEx lost
hundreds of millions of dollars following
its failed emergent strategy. In retrospect, FedEx had made a
costly mistake by venturing outside of the
domain that was central to its intended strategy: package
delivery. [3]
Emergent strategies can also lead to tremendous success.
Southern Bloomer Manufacturing Company was
founded to make underwear for use in prisons and mental
hospitals. Many managers of such institutions
believe that the underwear made for retail markets by
companies such as Calvin Klein and Hanes is
simply not suitable for the people under their care. Instead,
underwear issued to prisoners needs to be
sturdy and durable to withstand the rigors of prison activities
and laundering. To meet these needs,
Southern Bloomers began selling underwear made of heavy
cotton fabric.
An unexpected opportunity led Southern Bloomer to go beyond
its intended strategy of serving
institutional needs for durable underwear. Just a few years after
opening, Southern Bloomer’s
performance was excellent. It was servicing the needs of about
125 facilities, but unfortunately, this was
creating a vast amount of scrap fabric. An attempt to use the
scrap as stuffing for pillows had failed, so the
scrap was being sent to landfills. This was not only wasteful but
also costly.
One day, cofounder Don Sonner visited a gun shop with his son.
Sonner had no interest in guns, but he
quickly spotted a potential use for his scrap fabric during this
visit. The patches that the gun shop sold to
clean the inside of gun barrels were of poor quality. According
to Sonner, when he “saw one of those
flimsy woven patches they sold that unraveled when you
touched them, I said, ‘Man, that’s what I can do’”
with the scrap fabric. Unlike other gun-cleaning patches, the
patches that Southern Bloomer sold did not
give off threads or lint, two by-products that hurt guns’
accuracy and reliability. The patches quickly
became popular with the military, police departments, and
individual gun enthusiasts. Before long,
Southern Bloomer was selling thousands of pounds of patches
per month. A casual trip to a gun store
unexpectedly gave rise to a lucrative emergent strategy. [4]
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Realized Strategy
A realized strategy is the strategy that an organization actually
follows. Realized strategies are a product of
a firm’s intended strategy (i.e., what the firm planned to do),
the firm’s deliberate strategy (i.e., the parts
of the intended strategy that the firm continues to pursue over
time), and its emergent strategy (i.e., what
the firm did in reaction to unexpected opportunities and
challenges). In the case of FedEx, the intended
strategy devised by its founder many years ago—fast package
delivery via a centralized hub—remains a
primary driver of the firm’s realized strategy. For Southern
Bloomers Manufacturing Company, realized
strategy has been shaped greatly by both its intended and
emergent strategies, which center on underwear
and gun-cleaning patches.
In other cases, firms’ original intended strategies are long
forgotten. A nonrealized strategy refers to the
abandoned parts of the intended strategy. When aspiring author
David McConnell was struggling to sell
his books, he decided to offer complimentary perfume as a sales
gimmick. McConnell’s books never did
escape the stench of failure, but his perfumes soon took on the
sweet smell of success. The California
Perfume Company was formed to market the perfumes; this firm
evolved into the personal care products
juggernaut known today as Avon. For McConnell, his dream to
be a successful writer was a nonrealized
strategy, but through Avon, a successful realized strategy was
driven almost entirely by opportunistically
capitalizing on change through emergent strategy.
Strategy at the Movies
The Social Network
Did Harvard University student Mark Zuckerberg set out to
build a billion-dollar company with more
than six hundred million active users? Not hardly. As shown in
2010’s The Social Network, Zuckerberg’s
original concept in 2003 had a dark nature. After being dumped
by his girlfriend, a bitter Zuckerberg
created a website called “FaceMash” where the attractiveness of
young women could be voted on. This
evolved first into an online social network called Thefacebook
that was for Harvard students only. When
the network became surprisingly popular, it then morphed into
Facebook, a website open to everyone.
Facebook is so pervasive today that it has changed the way we
speak, such as the word friend being used
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as a verb. Ironically, Facebook’s emphasis on connecting with
existing and new friends is about as
different as it could be from Zuckerberg’s original mean-
spirited concept. Certainly, Zuckerberg’s
emergent and realized strategies turned out to be far nobler than
the intended strategy that began his
adventure in entrepreneurship.
The Social Network demonstrates how founder Mark
Zuckerberg’s intended strategy gave way to
an emergent strategy via the creation of Facebook.
Image courtesy of Robert Scoble,
http://www.flickr.com/photos/scobleizer/5179377698.
K E Y T A K E A W A Y
• Most organizations create intended strategies that they hope to
follow to be successful. Over time,
however, changes in an organization’s situation give rise to new
opportunities and challenges.
Organizations respond to these changes using emergent
strategies. Realized strategies are a product of
both intended and realized strategies.
E X E R C I S E S
1. What is the difference between an intended and an emergent
strategy?
2. Can you think of a company that seems to have abandoned its
intended strategy? Why do you suspect it
was abandoned?
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3. Would you describe your career strategy in college to be
more deliberate or emergent? Why?
[1] Mintzberg, H., & Waters, J. A. 1985. Of strategies,
deliberate and emergent. Strategic Management Journal, 6,
257–272.
[2] Donahoe, J. A. 2011, March 10. Forbes: Fred Smith’s
fortune grows to $.21B. Memphis Business Journal.
Retrieved
fromhttp://www.bizjournals.com/memphis/news/2011/03/10/for
bes-fred-smiths-fortune-grows-
to.html; Fortune: FedEx 8th “most admired” company in the
world. Memphis Business Journal. Retrieved
from http://www.bizjournals
.com/memphis/news/2011/03/03/fortune-fedex-8th-most-
admired.html
[3] Funding Universe. FedEx Corporation. Retrieved
fromhttp://www.fundinguniverse.com/company -
histories/FedEx-Corporation-Company-History.html
[4] Wells, K. 2002. Floating off the page: The best stories from
the Wall Street Journal’s middle column. New York:
Simon & Shuster. Quote from page 97.
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1.3 The History of Strategic Management
L E A R N I N G O B J E C T I V E S
1. Consider how strategy in ancient times and military strategy
can provide insights to businesses.
2. Describe how strategic management has evolved into a field
of study.
Those who cannot remember the past are condemned to repeat
it.
- George Santayana, The Life of Reason
Santayana’s quote has strong implications for strategic
management. The history of strategic management
can be traced back several thousand years. Great wisdom about
strategy can be acquired by
understanding the past, but ignoring the lessons of history can
lead to costly strategic mistakes that could
have been avoided. Certainly, the present offers very important
lessons; businesses can gain knowledge
about what strategies do and do not work by studying the
current actions of other businesses. But this
section discusses two less obvious sources of wisdom: (1)
strategy in ancient times and (2) military
strategy. This section also briefly traces the development of
strategic management as a field of study.
Strategy in Ancient Times
Perhaps the earliest-known discussion of strategy is offered in
the Old Testament of the
Bible. [1] Approximately 3,500 years ago, Moses faced quite a
challenge after leading his fellow Hebrews
out of enslavement in Egypt. Moses was overwhelmed as the
lone strategist at the helm of a nation that
may have exceeded one million people. Based on advice from
his father-in-law, Moses began delegating
authority to other leaders, each of whom oversaw a group of
people. This hierarchical delegation of
authority created a command structure that freed Moses to
concentrate on the biggest decisions and
helped him implement his strategies (Figure 1.4 "Strategy in
Ancient Times"). Similarly, the demands of
strategic management today are simply too much for a chief
executive officer (the top leader of a
company) to handle alone. Many important tasks are thus
entrusted to vice presidents and other
executives.
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24
In ancient China, strategist and philosopher Sun Tzu offered
thoughts on strategy that continue to be
studied carefully by business and military leaders today. Sun
Tzu’s best-known work is The Art of War. As
this title implies, Sun Tzu emphasized the creative and
deceptive aspects of strategy.
One of Sun Tzu’s ideas that has numerous business applications
is that winning a battle without fighting is
the best way to win. Apple’s behavior in the personal computer
business offers a good example of this idea
in action. Many computer makers such as Toshiba, Acer, and
Lenovo compete with one another based
primarily on price. This leads to price wars that undermine the
computer makers’ profits. In contrast,
Apple prefers to develop unique features for its computers,
features that have created a fiercely loyal set of
customers. Apple boldly charges far more for its computers than
its rivals charge for theirs. Apple does
not even worry much about whether its computers’ software is
compatible with the software used by most
other computers. Rather than fighting a battle with other firms,
Apple wins within the computer business
by creating its own unique market and by attracting a set of
loyal customers. Sun Tzu would probably
admire Apple’s approach.
Perhaps the most famous example of strategy in ancient times
revolves around the Trojan horse.
According to legend, Greek soldiers wanted to find a way to
enter the gates of Troy and attack the city
from the inside. They devised a ploy that involved creating a
giant wooden horse, hiding soldiers inside
the horse, and offering the horse to the Trojans as a gift. The
Trojans were fooled and brought the horse
inside their city. When night arrived, the hidden Greek soldiers
opened the gates for their army, leading to
a Greek victory. In modern times, the term Trojan horse refers
to gestures that appear on the surface to
be beneficial to the recipient but that mask a sinister intent.
Computer viruses also are sometimes referred
to as Trojan horses.
A far more noble approach to strategy than the Greeks’ is
attributed to King Arthur of Britain. Unlike the
hierarchical approach to organizing Moses used, Arthur
allegedly considered himself and each of his
knights to have an equal say in plotting the group’s strategy.
Indeed, the group is thought to have held its
meetings at a round table so that no voice, including Arthur’s,
would be seen as more important than the
others. The choice of furniture in modern executive suites is
perhaps revealing. Most feature rectangular
meeting tables, perhaps signaling that one person—the chief
executive officer—is in charge.
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25
Another implication for strategic management offered by King
Arthur and his Knights of the Round Table
involves the concept of mission. Their vigorous search to find
the Holy Grail (the legendary cup used by
Jesus and his disciples at the Last Supper) serves as an
exemplar for the importance of a central mission
to guide organizational strategy and actions.
Lessons Offered by Military Strategy
Key military conflicts and events have shaped the understanding
of strategic management (Figure 1.5
"Classic Military Strategy"). Indeed, the word strategy has its
roots in warfare. The Greek
verb strategos means “army leader” and the idea of stratego
(from which we get the word strategy) refers
to defeating an enemy by effectively using resources. [2]
A book written nearly five hundred years ago is still regarded
by many as an insightful guide for
conquering and ruling territories. Niccolò Machiavelli’s 1532
book The Prince offers clever recipes for
success to government leaders. Some of the book’s suggestions
are quite devious, and the
word Machiavellianis used today to refer to acts of deceit and
manipulation.
Two wars fought on American soil provide important lessons
about strategic management. In the late
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Running head KONAMI 1KONAMI.docx

  • 1. Running head: KONAMI 1 KONAMI 18 Project 1: External Environmental Analysis Travis Smith Dr. Andrew Wyner UMUC University 16 April 2019Company Overview Konami Holdings was founded in 1969 and was the brainchild of Kagemasa Kozuki. The company operated in the digital entertainment segment of the industry and was operating in four different segments which helped in diversifying the business model of the company. These four segments included games, health, entertainment (digital), and pachislot & Pachinko. Each of its businesses operates in a different segment
  • 2. but in the digital domain which helps in diversifying the business. The company has been operating for several decades and remained successful in establishing its places in the market. It is known for the mobile games it creates mainly but card games along with arcade games are also its specialty. Its health segment has provided credible products and services to clients in the health and fitness segment of the market. Not only does the company provide digital fitness products but it also creates machines for fitness that are widely used. The company was mainly founded to create products for amusement and entertainment of people as it found a gap in the market. The founder of the company realized that there were not many companies operating in the digital entertainment segment and hence, decided to seize this opportunity to enter the market. The company’s capital kept increasing over the years and by 1979, it was selling products in the US. Given that the company had a humble start in Osaka as a repair and gaming shop, it proved to be a success story many years later through its constant innovation and proper planning. Although the company is known by its founder and current chairman, Kagemasa Kozuki born in Osaka, Japan and he is son of it must be noted that a few other people by the names of Hiro Matsuda, Yoshinobu Nakama, and Shokichi Ishihara also played a crucial role in the progress of the company over the years. It is interesting to note that the company’s name is an amalgam of the first letters of the names of all these people which highlights their importance in the success and progress of the company. The games produced by the company were very popular in Japan which encouraged the company to start selling them in other regions as well. Amongst the international markets targeted by the company, USA turned out to be the most profitable one as the demand in this market was good. With the changing times and the popularity of the internet, the company also decided to
  • 3. evolve its business landscape by producing computer games. Just like arcade games and other products, the company was able to make its place in the domain of computer games in no time. The most popular computer games produced by the company includes Fortune Trip and Teenage Mutant Ninja Turtle. Today, the company provides software for popular gaming consoles such as Nintendo Wii, and Playstation. Hence, the company has remained successful in this market by actively evolving its business model and changing with the times to provide the best quality products and services to its target audience. The company has been doing well in financial terms as well. It can be seen from the financial statements of the company for the past several years that it has a steady stream of revenue and profits. For example, in the year 2018, the company earned a revenue of 239,497 million Japanese Yen (JPY) and in 2017, it earned 229,922 JPY. According to Bloomberg, the company has 4,706 employees presently. General Environment (PESTLE) The external environment in which Konami operates is becoming competitive with every passing day. With new companies striving to get a larger chunk of the market share, it has become necessary for the existing companies like Konami to constantly upgrade their products and services and never stop innovating. In order to understand the external environment of the company in a better way, the section below presents the PESTLE analysis which sheds light on the political, economic, social, technological, legal, and environmental landscape in which the company operates. Political According to Osaki (2019, p. 2), Japan’s political landscape is going to be ‘hectic’ as it will go through massive changes in the year of 2019 such as the end of Emperor
  • 4. Akihito’s era and the commencement of a new time for the country. While it sounds exciting and progressive, it must be noted that political changes always come with uncertainty which impacts the economic well-being and international standing of a country. It is expected that political tension is going to increase later in the year which is going to impact businesses operating in all industries. For Konami, this will be a tumultuous time as its products do not fall in the category of daily consumption of necessity but are rather more inclined towards luxury. When such a situation occurs, people stop or reduce the consumption of luxury products and services. Some can say that the company has both B2B and B2C consumers which makes it better prepared for such challenges. However, it must be noted that the company’s B2B customers are eventually targeting B2C market where the customer demand will fall. Hence, this will impact both segments and all industries and decrease the profits of the company. Economic As mentioned in the prior section, the economic well-being of a company is linked with the political stability of the country. Given that the political landscape of the country is going through changes in this year, there is definitely going to be an impact, possibly negative, on the economy of the country. According to Osaki (2019, p.3), there is going to be an increase in consumption tax in Japan following the elections which will increase the rates from 8% to 10%. This will have a huge impact on the consumption pattern of people and hence, negatively impact the business growth of the companies in all sectors. Baird (2019, p.1) states that the income of people is barely growing in Japan which, when paired with the anticipated economic risks, will bring an economic downturn of a few years for the country. However, the country is one of the top three strongest economies in the world which provides it a cushion to fall on in cases of economic downtimes.
  • 5. Social The country of origin of Konami is Japan which has a unique social structure and cultural norms. The country is mainly comprised of islands four of which are big ones and the rest of the country is formed by numerous small ones. The country touches the Pacific Ocean on one side as well. In addition to that, the country is located on a major fault lines which means that it frequently is targeted by earthquakes. On top of that, the country also has several volcanoes. This means that geographically, the country is situated in critical region which is poses several threats to the well-being of the nation. However, the country has managed to survive all the natural disasters over time. It must be noted that the country is mainly an urban sphere as a large chunk of its population dwells in urban areas. The main and official language spoken in the country is Japanese. The country made sure that it brought unity in the nation by having one official language and one main dialect. Now, education is also given in Japanese in the country and official language is also the same. The Japanese society is strongly connected to its cultural roots which are given importance in everyday life in the country. The Japanese cultural forms the basis of even business life and is grounded in feelings of love and respect for others (especially elders). The highly educated population of Japan makes it necessary for corporations like Konami to be truthful in their messaging as the consumers are knowledgeable. In addition to this, Japanese customers are known for their desire for high quality products which puts pressure on the corporations to come up with the right match of products and services with the consumer needs. Technology Japan is known for producing highly innovative products. It is the home of companies like Samsung which is competing against Apple Incorporation all over the world. The country has good environment for the growth and progress of new ventures
  • 6. on the basis of its strong technological system. The country is rapidly embracing new technological trends and moving towards the creation of a smart society where AI and IoT will prevail and guide consumer experience. The government is very supportive and is trying its best to facilitate the development of technological landscape of the country. This means that for companies like Konami, it is imperative to constantly innovate to stay aligned with the country’s and consumers’ goal of being technologically advanced in every possible manner. When it comes to the gaming industry, artificial intelligence and internet of things are the two major trends that are dominating the technology world and will have an impact on the gaming industry as well. Legal Konami is based in a country where the corporate taxation is higher as compared to that in the region. Although the taxation system is very transparent, it still is a cost burden on corporations. In addition to this, the country has strict laws regarding quality control and transparency of operations which requires corporations to be truthful in what they convey to the customers and through their advertisements. The country also has a strong legal system which keeps corporations under scrutiny for any misdemeanor and ensures that the consumers are protected. However, the country’s legal system also favors the growth and progress of businesses which are strong pillars of its economic system. Environmental According to Sumikura and Osborn (1998, p.1), the Environment Protection Agency was founded in 1971 in Japan in the wake of rapid development in the country which negatively impacted the environment and required immediate action in the years leading up to 1960s. Since then, the country has made sure to protect the environment with the help of a number of rules and regulations. The country has been growing
  • 7. rapidly in terms of economy which means that the growth of industrialization would have a severe impact on the environment. Realizing this, the government urged the Environment Protection Agency to play its part in conserving the environment. The country now has Basic Environment Law and is ensuring sustainable development. This means that companies like Konami have to follow these rules and play their part in conserving the environment. Konami Holdings is already working on this aspect of its business by streamlining its processes to reduce their impact on the environment. It is also taking care of the rights of its employees and customers to operate in a more sustainable manner. In the future, the company needs to align its processes more with the environmental conservation goals of the country and SDGs. Trend Impacting the Gaming Industry One trend which has the ability to impact the gaming industry on a massive scale is the rapid development of technology. Jha (2017, p.2) states that artificial intelligence has significantly impacted the gaming industry by giving life to virtual world of games. Artificial intelligence has been enhancing the experience of gamers through smart usage of data available. Soon, machine learning will become a part of the process too to further the experience of gamers. In addition to this, two dimensional games are going to be replaced by three dimensional games in the near future which will free the gaming world of the limitations posed by two dimensional technology. The impact of technology can be seen from the fact that games can now be played online with people participating from all over the world and creating a whole new world of interactive games. What previously used to be geographically limited is now accessible worldwide. Buff (2018, p. 2) states that the growth of gaming industry is dependent on technological advancements as it allows the gaming industry to broaden its perspective and develop new products that eventually leads to an increase in the revenue of the industry. Hence, the trend that will be the most
  • 8. impactful for the gaming industry is the change in technology. Areas of Uncertainty Related to Trends In light of the above-mentioned discussion, it can be seen that there are certain areas of uncertainty which can compel the company to change its strategy. The most important area of uncertainty arises out of political situation. Konami is based in Japan which is undergoing political changes that have given rise to uncertainty. These changes can impact economy of the country as well which can directly impact the well-being of corporations. In addition to this, economic changes can impact the strategies of the company as well. Konami is a global player in the gaming industry which means that economic changes happening beyond the border of Japan are also going to impact the well-being of Konami. Hence, if economic changes occur within or outside of Japan, the company will have to change its strategies accordingly. Furthermore, technological changes are happening rapidly which bring with them a lot of uncertainty. As the trends change, companies have to change the way they operate in the gaming industry as well. Therefore, Konami needs to be aware of current and anticipated technological advancements to mold its strategies accordingly.Industry Evaluation Although Konami has a strong base in Japan, it sells its products and services worldwide which makes it a global player in the gaming industry. The major competitors of Konami globally are Sony, Blizzard, and EA. The major regions where gaming software and services are popular include USA, Middle East, China, and Japan. The competitor analysis of the company discussed below. Porter’s Five Forces Mentioned below are the Porter’s Five Forces regarding the gaming industry in which Konami operates? · Market competition: The competition in the gaming industry is
  • 9. high as can be seen from the big names that are a part of it globally. According to Wijman (2018, p.1), $137.9 billion was the anticipated revenue for the global gaming industry for the year 2018. Seeing the massive amount of revenue generated in this area, gaming industry receives several new players every year. These small players are not able to match the skills of established players like Konami and Sony. However, they do have the potential to collectively take away a substantial share of the revenue in this industry. In addition to this, the era of digitalization and smartphones has opened more avenues to gain revenue and hence, increased competitors. The number of mobile game players is increasing with every passing day which makes mobile games a new hot market. In the past few years, mobile games like Candy Crush and Temple Run gained popularity massively. Anderton (2017, p. 3) believes that in the coming years, there is going to be fierce competition in the gaming industry. · Threat of new entrants: The threat of new entrants is high in the gaming industry. This can be seen especially in the mobile games segment where almost anyone can create a game and upload it on app store and play store for the masses to play. While the gaming software segment is a bit more complicated to enter, there is no barrier to entry as such for new entrants which makes it possible for new companies to enter the market with ease. Depersio (2018, p. 11) states that due to low entry barriers and lack of regulations, the threat of new entrants is high in the gaming software industry. · Supplier power: Since games are considered a luxury especially the ones for Nintendo Wii and Playstations, the supplier power is high. The suppliers can negotiate better terms and high prices which is why the games and software for these products are expensive. However, if there are a number of suppliers for a company, their power is limited. Depersio (2018, p. 14) states that EA has a number of suppliers for its diversified business which reduces the power of suppliers. · Buyer power: Since these games fall in the entertainment
  • 10. category and are luxury products, they are a bit pricey. There is no established rule or law to control the prices of such games. This makes the customers pickier about their purchases. Depersio (2018, p. 12) states that buyers care about the bundle offers they get and one wrong move of a game developing company can result in massive losses. According to Depersio (2018, p. 12), the gaming company Sega had to face this situation in the case of Dreamcast console which resulted in massive losses for the company. This shows that buyers want value for money and hence, the buyer power is high in this industry. · Threat of substitutes: There are numerous substitutes for gaming software and services. Since these fall in the category of entertainment, people have numerous other options to entertain themselves. These options include but are not limited to movies, outdoor games, socializing, and much more. Even within the gaming domain, there are a number of options available to people these days. Depersio (2018, p. 13) states that people can now play app-based games on their smartphones which are very low in cost compared to video games. Hence, the threat of substitutes is high. Competitor analysis According to Cullen (2019, p.3), Sony is expected to bag a revenue of $2.8 billion by the end of first quarter of this year. The company is the maker of Play station which is loved by gamers all over the world. It has been constantly upgrading the gaming system over the decades which has not only enhanced consumer experience but has also made it possible to gain loyal customers. Another major competitor of Konami is EA sports which has been a major player in the gaming software industry for a long time. According to Statista (n.d., p.1), the company gained a revenue of $5.15 billion in the year 2018. It is expected to exponentially increase its revenue over the coming years as well. Blizzard is another major competitor in the
  • 11. gaming industry and is known for notable games in the past. The company made a revenue of $7.5 billion in 2018 due to its innovative products and services. From this information, it can be analyzed that the company has some serious competitors globally. In terms of major games and features, EA is known for producing The Sims, Need for Speed, FIFA, and Battlefield. All these games are computer-based and are still played worldwide by people of all ages. The company produces computer games, mobile games, and online services for internet-based devices. In the case of Blizzard, the company is known for high quality products. It is popular for its game called The Lost Vikings. Sony is a producer of Playstations which gives it an advantage in the gaming arena. It produces both hardware and software of games. Competitor Profile Matrix For this matrix, five critical success factors have been chosen. These factors are chosen on the basis of the industry and the areas that the companies should be focusing on as a part of their business. According to Mohan (2018, p. 11), effective marketing management is a key success factor for a game development company as it ensures that the target audience is aware of the new products and services development by the company and brings more revenue. Companies can make use of digital marketing in order to reach out to as many people as possible to increase their customers and become more visible in the market. In addition to this, the quality of a game and its architecture is very important for its success. Mohan (2018, p. 16) is of the opinion that a sound gaming architecture ensures that the game is ready for deployment and gives a clear idea about the game’s quality. As mentioned in the prior sections, IT and technological development is crucial for the success of a gaming industry. Johnson (2018, p. 1) states that the technology is constantly changing and impacting the gaming industry the
  • 12. most. This makes IT capabilities an important success factor for a gaming industry. Given that the competition is high in this industry, it is important for game developers to retain customers. One way of doing so is through good customer service. Ransford (2016, p. 5) cites the results of a report produced by ‘Econsultancy Multichannel Customer Experience’ which states that gamers value good customer service which is an effective way to retain them. Hence, customer service is another critical success factor for companies in this industry. On the basis of the importance of each critical success factor, weights have been assigned to them. IT capabilities appear to be the most crucial area which is why the highest weight of 0.4 is assigned to it. Marketing management, quality of architecture, and customer service are equally important, hence, weight of 0.2 is given to each. On the basis of analysis conducted in the competitor’s section, rating has been allocated to each of these success factors on the basis of the companies as shown below. Critical Success Factor Weight EA Blizzard Sony Rating Score Rating Score Rating Score Customer service 0.2 2 0.4 1
  • 14. SWOT Analysis(Partial OT) Opportunities · It can expand in the growing markets of Turkey, India, and other emerging markets. · It can expand into mobile games segment. · It can leverage IT advancements to enter segments like VR and IoT based games Threats · Political and economic instability is a major threat to the well- being of the company. · Laws revolving around corporate taxation and environment protection are changing and are a constant threat. EFE Matrix Mentioned below is the EFE matrix for Konami. The weight and rating are assigned according with the significance of each of the listed factors. For example, for Konami, benefits from IT advancements are crucial to the growth of the company and hence, the weight and rating is high. For the company, it is high time to start investing in the development of games for smartphones. According to Statista (n.d., p. 2), App store gained 80% and Play store gained 90% of its total revenue in 2016 from gaming applications. In addition to this, Statista (n.d., p. 2) states that there were 2.8 billion average active users each month on mobile games all over the world. This shows the potential of mobile gaming apps and the revenue stream that can be generated from this segment. Based on this information, a weight of 0.2 has been assigned to this opportunity. As mentioned in the prior section, IT advancement is bringing more opportunities for gaming industry and hence, is very important for its development. A rating of 0.3 is assigned to benefits from IT advancement accordingly. Hagenmeier (2014, p. 3) states that emerging markets provide a good opportunity for growth for the gaming industry and China is a great example of that given that the country had a size of $20.5 billion in 2013 which
  • 15. has grown ever since. Therefore, a rating of 0.2 is assigned to this opportunity. In terms of threats, political instability is one of the most significant ones at this time. As explained before, political instability impacts businesses and since Japan is going through a power shift at the moment, it is a major threat at this time. Therefore, a rating of 0.15 has been assigned to this threat. In the time to come, Japan is going to increase the tax imposed on corporations which is a big threat to the profitability of Konami. According to Kyodo (2018, p. 1), the prime minister of Japan confirmed the intention of a tax hike for the year 2019 in October 2018. In terms of economy, it is also going through an uncertain time due to political changes which increases the threat of an economic downtime. Hence, a rating of 0.1 has been assigned to it. Opportunities Weight Rating Total Weighted Score Expanding smartphone games segment 0.2 2 0.4 Benefits from IT advancement 0.3 3 0.9 Expanding in emerging markets (Turkey, China, India) 0.2 2 0.4 Threats
  • 16. Political instability 0.15 3 0.45 New taxes on corporations 0.05 2 0.1 Economic downturn 0.10 2 0.2 Total 1 2.45Conclusion Konami is a significant player in the gaming industry globally. The company has been operating since 1969 and has a track record of success over the decades. It faces a lot of competition in the market as can be seen from the presence of EA, Blizzard, and Sony as other significant producers of gaming software in the global gaming industry. The company has several strengths such as its presence in the market for several decades, loyal customer base, and good corporate relations with other companies such as Sony. It also has several weaknesses as well such as the company’s lack of presence in the mobile gaming industry. There are numerous opportunities in the global gaming industry which can be exploited by Konami such as expanding its presence in emerging markets like Turkey and benefiting from IT advancements. However, the threats to the company’s growth are also a lot. For example, the company will face political instability in 2019 in its country of origin which has the potential of impacting its revenues. Keeping all this in mind, it can be safely stated that the company has a bright future and will stay profitable if it continues to evolve with the
  • 17. changing times. The company has a diverse portfolio of products and services within the gaming industry which makes it stand shoulder to shoulder with EA which is the key competitor. It is doing well in terms of products and services when compared with Blizzard but appears to be at the same level as EA. However, it is lagging behind Sony which not only produces gaming software but has its own hardware in the form of gaming consoles. To stay profitable in future, Konami should focus on new avenues of growth such as expanding to emerging markets and developing mobile app-based games. References Abe says he's going ahead with Japan's consumption tax hike in October 2019 | The Japan Times. (2018). Retrieved from https://www.japantimes.co.jp/news/2018/10/15/business/econom y-business/abe-says-hes-going-ahead-japans-consumption-tax- hike-october-2019/#.XLYnxSgzY2w Anderton, K. (2017). The Business Of Video Games: A Multi Billion Dollar Industry [Infographic]. Retrieved from https://www.forbes.com/sites/kevinanderton/2017/04/29/the- business-of-video-games-a-multi-billion-dollar-industry- infographic/#7d89b2106d27 Buff, C. (2018). How will technology change the future of the gaming industry?. Retrieved from https://medium.com/buff- game/how-technology-will-change-the-future-of-the-gaming- industry-202be868240c Company Overview of Konami Holdings Corporation. (2019). Retrieved from https://www.bloomberg.com/research/stocks/private/snapshot.as p?privcapId=880912 Cullen, J. (2019). PlayStation sales begin to slow, but Sony still rules the year in revenue. Retrieved from https://gamedaily.biz/article/566/playstation-sales-begin-to- slow-but-sony-still-rules-the-year-in-revenue Depersio, G. (2018). Porter's Five Forces and Electronic Arts (EA). Retrieved from https://www.investopedia.com/articles/markets/012716/analyzin
  • 18. g-porters-five-forces-electronic-arts-ea.asp Electronic Arts: net revenue 2018 | Statistic. Retrieved from https://www.statista.com/statistics/269696/revenue-of- electronic-arts-since-2005/ Environmental Protection Policy in Japan - Introduction [MOE]. Retrieved from https://www.env.go.jp/en/policy/plan/intro.html HAGENMEIER, J. (2014). Invest In Video Gaming: A Booming Industry In Emerging Markets - Investing & Day Trading Education: Day Trading Academy. Retrieved from https://daytradingacademy.com/invest-video-games-booming- industry-emerging-markets/ Jha, B. (2017). How Does New Technology Impact The Gaming Industry?. Retrieved from https://www.gamasutra.com/blogs/BinayJha/20170221/291980/ How_Does_New_Technology_Impact_The_Gaming_Industry.ph p Johnson, Z. (2018). 5 Ways Technology And AI Are Changing The Gaming Industry. Retrieved from https://www.smartdatacollective.com/ways-technology-ai- changing-gaming-industry/ Mohan, N. (2018). The Complete List of Critical Success Factors For Gaming Producers. Retrieved from https://www.saviom.com/blog/complete-list-of-critical-success- factors-gaming-producers/ Osaki, T. (2019). Japan already in for politically hectic 2019, but may see 'double election' | The Japan Times. Retrieved from https://www.japantimes.co.jp/news/2019/01/02/national/politics -diplomacy/japan-already-politically-hectic-2019-may-see- double-election/#.XLYqsSgzY2x Sumikura, I., & Osborn, D. (1998). A BRIEF HISTORY OF JAPANESE ENVIRONMENTAL ADMINISTRATION: A QUALIFIED SUCCESS STORY?. Journal Of Environmental Law, 10(2), 241-256. doi: 10.1093/jel/10.2.241 Wijman, T. (2018). Global Games Market Revenues 2018 | Per Region & Segment | Newzoo. Retrieved from https://newzoo.com/insights/articles/global-games-market-
  • 19. reaches-137-9-billion-in-2018-mobile-games-take-half/ Writing-Up Your Research Paper Dr. Kandida Purnell City, University of London [email protected] The plan (roughly): Abstract: Introduction: Introduce research question/s Set the scene (context: empirical and academic) Provide summary of what’s to come Literature Review (/Theoretical Framework): What are the key academic debates in this area? What are the key concepts in the literature and how are they understood? What are the key theories in the literature that are informing your research? Methodology (theory that guides method): Research Design: What are you going to do? Why? Research Method/s: HOW will you do it? Detailed explanation/justification Shortcomings/potential drawbacks? Room for improvement? Discussion/Analysis: What did you find out? Finding: How does this respond to your research Qu? How does this relate to the literature/theories? Conclusion:
  • 20. Bibliography (does not count towards word count) Appendixes (do not count towards word count) Writing the Abstract An abstract is a condensed summary of your work that is placed at the beginning of a paper. Length: about 200 words. Four key pieces of information: a statement of the research question; the relevance or importance of the research question; the methods used to answer the research question; the research paper’s overall conclusions. Abstract example 1 Grieving, Valuing, and Viewing Differently: The Global War on Terror’s American Toll Abstract example 2 Body Politics and Boundary Work: Nobodies on Hunger Strike at Guantanamo (2013-2015)
  • 21. Writing the Introduction Motivation for the project: So what? What is the point of the research? Why should anyone care? Introduction should capture the reader’s interest Empirical scene setting: WHY so interesting? Academic scene setting: THE GAP A HOOK to draw/drag your readers in… SELL SELL SELL!! Writing the Intro: ‘the hook’ Writing the Intro: ‘the hook’ Writing the Introduction Introduce the research question Asking XXXXXXXX? In this research paper ….. In this research paper I respond to the question XXXXXX? By ………
  • 22. With the question XXXXXXXX? driving this project, research detailed in the following pages involves…. Writing the intro Democracy Terrorism Security Ideology The State Human Rights Anarchy Gender War Equality Capitalism Introduce and UNPACK your key concepts Concepts are ESSENTIALLY CONTESTED Do not assume your readers know how you are using your key concepts UNPACK THEM (tell the reader how YOU understand your key concepts) Writing the Introduction
  • 23. Solution Summarise your methodology: Research design Research methods Findings A research paper (or essay for that matter) is not a mystery novel; do not keep your audience guessing as to what the takeaway message will be. by providing some conclusions up front, someone who reads your paper will be able to understand how you reached your conclusions much more effectively Abstract / Intro Yes they do a lot of the same thing Do not worry about repetition
  • 24. Abstract is much shorter Abstract is what people read online BEFORE clicking into the main article PDF Have to ‘sell’ the article so people then download-read the whole thing Writing up your Literature Review Objective of a Literature Review It helps situate a study within the context of the literature itself. It establishes credibility of the researcher as an expert in the field. Structure and Style The researcher must synthesize the literature in a concise, useful way to demonstrate mastery of the subject at hand. Remember that lit review should give the reader an overview of the debates and discussions your research will intervene into / build on Use subheadings: e. theory section/s could make reference to existing theories that help provide the framework for your research
  • 25. Writing up your Methodology The methodology section in a research paper briefly outlines the researcher’s approach to research/responding to the research question/s. Research Design: What kind of a project is this? Research Method/s: You should discuss the specific research method/s you have used IN DETAIL JUSTIFY YOUR CHOICES IN WRITING Whether quantitative or qualitative methods used should be outlined in this section. Case-Study Justification You should discuss which cases you selected for your study and how these were selected. Potential drawbacks/room for improvement Acknowledge your research design and methods’ weaknesses in light of limitations/barriers you faced.
  • 26. Writing up your Methodology Research Design: What kind of a project is this? Research design (re-cap) = The overall strategy you will employ to investigate your argument Types of research design: Experimentation Observation Case Studies: Single Case Study Comparative Case Studies ‘Large N’ quantitative design Writing up your Methodology Surveys Interviews Focus Groups Ethnography
  • 27. Participant Observation Archival Research Textual Analysis: Content Analysis Discourse Analysis Statistical Analysis Research Method/s: You should discuss the specific research methods you have used IN DETAIL Justify your choices IN WRITING 16 Writing up your Methodology Did you take a qual or quant approach? Or a mix? Why? How? Quantitative research refers to research using numbers, and qualitative research refers to that which does not use numbers. Quantitative and qualitative research are not in opposition to
  • 28. one another. Rather, they can complement each other. Writing up your Methodology Case-Study Justification You should discuss which cases you selected for your study and how these were selected. What is a case ? A conflict An event A country A region A city A political party A social movement A terrorist group A person
  • 29. Writing up your Methodology Case-Study Selection Random Typical or Extreme/Deviant? Influential? Hard or Easy? Diverse? Most similar or most different? EXPLAIN & JUSTIFY Writing up your Discussion Your discussion is where you discuss your findings Not all of them
  • 30. Be selective What were the most interesting and/or surprising things you found out? How to present your findings You should avoid using the word “prove” in your writing. Often better to use phrases such as “the results suggest” or “the findings imply” Writing up your Discussion How to present your findings You should avoid using the word “prove” in your writing. Often better to use phrases such as “this suggests” or “the finding implies” REFER BACK TO THE LITERARURE introduced in Lit Review Make it plain HOW your findings draw and build on the debates, theories, and arguments introduced in the Lit Review Make it plain HOW your findings change/update what we know about XXX place/event/thing This is where you detail your CONTRIBUTIONS TO
  • 31. KNOWLEDGE Writing up your Discussion Negative findings (evidence does not support theory) A negative finding may be disappointing, but it is still a finding Discuss reasons for which your findings may have gone contrary to expectation and to engage in ex post theorizing if you believe your theory needs revision. Writing up your Conclusion Refer back to the research question. Now that you have completed your research, how well have you addressed your issue? Reiterate whether you were able to support your hypotheses with the data you collected and analyzed
  • 32. Summarize the main findings Writing up your Conclusion Acknowledge your project’s limitations and weaknesses Provide the reader an idea of how the re- search could have been improved and whether new questions based on the re- search findings have emerged. In hindsight should you have used a different method, used different tools or adopted a different form of analysis? You will be credited for your perception and understanding in the examiner’s marking. Writing up your Conclusion Generalization Discuss how the findings from the research can be generalized to other cases. SELL SELL SELL!!
  • 33. The last word(s) Overall significance? Questions raised? Avenues opened up for further research? Writing Up Your Conclusion (Thomas 2016) Writing Tips The “I” Debate: can I write in first person? YES Most often a researcher will use the first person in specific sections of a research report, such as the introduction, theory and hypotheses, methods and data, or results and discussion. Writing Sequence Researchers do not write their papers in order from the abstract to the conclusion. the introduction to the paper should among the last sections to be written for a paper, after the re- search is complete and the
  • 34. researcher knows exactly what the paper’s conclusions are. Appendix? Some of you will have appendixes Some of you won’t Remember: carries no word count so use to your advantage Appendix items may include: Interview transcripts (coded) Texts analyzed (coded) Full list of participants Full category/coding list Full list of sites (if ethnography ANY QUESTIONS?????? The plan (roughly): NOW WITH APPROX WORD COUNTS!!! Abstract: 200ish (does not count towards word count) Introduction: 500 max
  • 35. Introduce research question/s Set the scene (context: empirical and academic) Provide summary of what’s to come Literature Review (/Theoretical Framework): 1,000ish What are the key academic debates in this area? What are the key concepts in the literature and how are they understood? What are the key theories in the literature that are informing your research? Methodology (theory that guides method): 750-1,000 Research Design: What are you going to do? Why? Research Method/s: HOW will you do it? Detailed explanation/justification Shortcomings/potential drawbacks? Room for improvement? Discussion/Analysis: 1,000-1,500ish What did you find out? Finding: How does this respond to your research Qu? How does this relate to the literature/theories? Conclusion: 500 max Bibliography (does not count towards word count) Appendixes (do not count towards word count)
  • 36. One issue you will need to define is how you will evaluate whether it’s good/positive to decrease the voting age? Is it the quality of democracy, economic prosperity or something else? In essence, what kind of positive observable outcomes we expect to see to prove that decreasing the voting age is positive? These are some questions · When is a convenient time to start one it’s voting career? · Is it a matter of age the interest for political life? · Which might lead to an uninformed vote choice? (The lack of political maturity, political interest and political knowledge of young voters) · It is higher level of turnout among voters younger than 18 years? Case Selection: Austrian[1] and Brazil[2] Regional Elections
  • 37. IP2021 Scholarly Writing: Introduction to Research Design and Methods Dr. Kandida Purnell City University London [email protected] Preliminary bits Moodle sign in: https://moodle.city.ac.uk/course/view.php?id=31500 2. Community Project Fund: https://www.citystudents.co.uk/getinvolved/yourcityfund/ Deadline: 27th Jan!! £500 to do something (eg. event, project) here at City! IP2021 Scholarly Writing: Introduction to Research Design and Methods Dr. Kandida Purnell City University London [email protected]
  • 38. Today Basics/Course details Intro to Research Key debates: Qualitative vs Qualitative? Positivist Vs Post-positivist Your first task * Warning This lecture contains the words epistemology, ontology, and methodology * However I’m assuming NO existing knowledge/experience of research design and execution I will be starting from the absolute basics There are no ‘stupid’ questions
  • 39. * BUT You will NEED to read, this (the core text): * Course Convenor Dr. Kandida Purnell Email: [email protected] @KandidaPurnell D512 Rhind Building Office hours: Monday 1430-1630 (DROP IN) OR book by e-mail for appointments outside of office hours Some Questions Where does knowledge come from? Who are the makers of knowledge? How is knowledge made?
  • 40. * Some Answers Where does knowledge come from? Knowledge is produced through research Who are the makers of knowledge? Knowledge is produced through research by researchers How is knowledge made? Knowledge is produced by researchers through the use of research methods * This course is not about: Essay writing (you’ve already done/mastered that) * This course is about: Making knowledge by DOING RESEARCH Becoming an ‘expert’
  • 41. Developing skills in research design Understanding epistemology (theory of knowledge) and ontology (theory of being) Understanding Methodology: The theory that guides your method (informed by epistemology and ontology) Understanding, selecting, and using an appropriate research method “technique for collecting and analysing data” (Stares, 2010) * Welcome to the world of research!!!!! Essay Writing Designing and conducting RESEARCH PROJECTS WRITING RESEARCH PAPERS WRITING YOUR DISSERTATION Research beyond the degree: PG or employment * What is Research? * Going out into the world armed with: a research question and/or
  • 42. hypothesisKnowledge of what has already been said on the issue/the key debates (you’ve done a literature review)a theory/some theories and some key conceptsa methodology (a theory about method)a/some research method/s* Coming back to the office and:Analysing your findingsDrawing conclusionsWriting it up! WARNING: In reality, research does not normally unfold in this linear fashion. RESEARCH METHODS YOU MIGHT USE:SurveysInterviewsFocus GroupsEthnographyParticipant ObservationTextual AnalysisCritical Discourse AnalysisStatistical Analysis The Research Process (in theory) Question Literature Review Method Analysis
  • 43. The Research Process (in reality) Initial Question Literature Review New Question Method Analysis
  • 44. Where does Research come from? * Organizations, Institutions, and Companies including:GovernmentsInternational OrganisationsPolitical ConsultanciesPolitical PartiesThink tanksCharitiesNon Governmental Organizations (NGOs)International Non Governmental Organisations (INGOs)Civil Society Organizations (CSOs)Universities Who makes it * People including:Policy OfficersResearch OfficersResearch AssistantsParliamentary AssistantsPolitical AssistantsPolitical ConsultantsAcademics (Graduates, people like you!)
  • 45. Welcome to our world!(Research is what we do when we’re not teaching!) * My Research Background Research topics: Global War on Terrorism War Performance, Commemoration, and Militarism Bodies, (In)Security, and War Aid transparency Green Economy Research: Purnell, K. 2018, ‘Grieving, Valuing and Viewing Differently: The Global War on Terror's American Toll', International Political Sociology, Vol. 12(2): 156-171. Impact Factor: 1.923. Purnell, K. and Danilova, N. 2018, ‘Dancing at the Frontline: Rosie Kay’s 5SOLDIERS De-Realises and Re-Secures the Global War on Terror’, Critical Studies on Security, Vol. 6(3): 370-375.
  • 46. Purnell, K. 2015, 'Body Politics and Boundary Work Nobodies on Hunger Strike at Guantánamo (2013–2015)', Alternatives: Global, Local, Political, Vol.39 (4): 271-286. Purnell, K. Forthcoming 2019. ‘Re-thinking the Body in Global Politics: Bodies, Body Politics, Bodies Politics:’, Routledge (Interventions series). Danilova, N. and Purnell, K. Forthcoming 2020, ‘The ‘Museumification’ of the Scottish Soldier and (Re)production of British Martial Race’, Critical Military Studies. Bird, J, Lawton, K and Purnell, K. 2010, ‘Green and Decent Jobs: The case for local action’, Institute for Public Policy Research. * Bringing Bodies Back: The British and American politics of repatriation and war performance during the Global War on Terror How do past and present military/militarised bodies come into view and make themselves known within the British and American contexts of the GWoT? ‘Bringing Bodies Back’ contributes to knowledge by comparatively analyzing/garnering holistic insight into overarching dynamics, logics, and the implications of bringing
  • 47. two kinds of bodies back, taking a dual approach by: Scrutinising the repatriations of British and American soldiers injured and KIA in conflicts ongoing under the banner of the GWoT; 2) Exploring British and American public performances and reenactments of past wars re-embodying experiences of WWI and the Vietnam War via national Centenary and 50th Anniversary commemorative effforts and involving Army/Artist engagement.Comparative case study analysis (US and UK)Fieldwork/Participant Ethnographies: US and UK Repatriation and Performance SitesSemi-Structured Interviews w/Key Stakeholders (Gov, Army, War Photographers, Military Families, Performers, Audiences, Artists) * [email protected] and the Performance of War in Public * How does [email protected] work towards engaging performing artists in the co-production, sanitisation and/or reframing of narratives relating to war/soldiering, particularly in regards to embodied gendered, sexualised, racialised experiences? How does the making visible of particular embodied
  • 48. experiences of soldiers feed into understandings of the contemporary British Army and larger geopolitical dynamics at play, particularly in relations to the visual politics of the GWoT? Fieldwork (Fringe Festival) Participant Auto-Ethnography (Performances) Semi-Structured Interviews (Choreographers, Army, Audience, Fringe Organisers) My Pre-Academic Research Life * http://www.publishwhatyoufund.org/the-index/2018 35 indicators to monitor aid transparencyStatistical analysis http://www.publishwhatyoufund.org/the-index/methodology/ My Pre-Academic Research Life * https://www.ippr.org/publications/green-and-decent-jobs-the- case-for-local-actionEthnographyFocus groupsInterviews
  • 49. Koen’s Research The promotion of and resistance to LGBT equality in international politics. EU accession of Serbia and how this process affects LGBT politics and activism. Power relations within transnational politics and the de- construction of core-periphery hierarchical relations, with a specific interest in topics dealing with masculinities and LGBT issues. * "Not 'coming out'? The attitudinal panopticon & the shallow Europeanisation of LGBT rights in Serbia" Fieldwork (Serbia/Brussels)Interviews (activists, policy makers)Ethnography (Pride events) Leonie’s Research The role of social movements, civil resistance campaigns and human rights activism in conflict and peace building. The Israeli-Palestinian conflict. She aims to understand how activism itself transforms and how it influences the trajectory of a conflict or peace process. *
  • 50. Negotiating Privilege: The Role of Internal Third-Party Interveners in Civil Resistance Campaigns: The Case of Israeli Anti-Occupation Activists.Fieldwork in Israel and O/TParticipant Ethnographies Informal Interviews To grow from reader/student to researcher/expert able to: Design research projects of your ownConduct research and write up:4,000 word research paper (this course’s requirement)10,000 word dissertation (next year) Why study research design and methods? How will I learn? 10 Weekly Lectures Introduction to the Module Research Question Reviewing the Literature Theory Concepts Research Design Case Selection Text Analysis Asking Questions and Research Ethics
  • 51. How to Write a Research Paper The core text (Halperin & Heath) + readings on Moodle Regular meetings with your Advisor: Allocated on the basis of the topic submitting Jan 25th Will discuss/advise on your progress throughout the course How will I be Assessed? Research Paper Length: 4,000 words Deadline: 2 May 2019 100% of the final mark Research Paper Outline (Basic skeleton, more to follow) Introduction Introduce research question/s Set the scene (context: empirical and academic) Provide summary of what’s to come Literature Review/Theoretical Framework What has everyone else in academia already said? What are the key academic debates in this area?
  • 52. What are the key theories informing your project What are the key concepts you will be working with? Methodology Research Method/s Discussion/Analysis Conclusions Bibliography Appendixes This is also the general form your dissertations will take next time RESEARCH METHODS YOU MIGHT USE:SurveysInterviewsFocus GroupsEthnographyParticipant ObservationTextual AnalysisCritical Discourse AnalysisStatistical Analysis A note on ‘Quantitative vs. Qualitative’ Research Quantitative research refers to research using numbers, and qualitative research refers to that which does not use numbers. Quantitative and qualitative research are not in opposition to one another. Rather, they can complement each other. The rift is largely artificial and receding (eg. 5 interviews)
  • 53. On Research/ingHow to make knowledge about politics and international relations?Key debate: Positivism vs Post- Positivism Where you sit on this will determine the type of questions you ask and your entire approach as a researcher… Positivism Knowledge about the social/political world can be obtained objectively The things comprising the social/political world can be observed, measured and studied ‘scientifically’ Comte (1848): Social matters can be studied in the same way that scientists studied physics and chemistry where there had been such success with scientific method (‘Enlightenment’) WHY?? Positivist Epistemology and Ontology Epistemology: Theory of knowledge. Positivist Epistemology: There is knowledge out there a priori
  • 54. to the researcher. We just have to uncover/get to know it, through our research. Ontology: Theory of things that have being/exist. There are lots of things that have being in the social/political world eg. Terrorism, Democracy. These exist a priori to the researcher who needs only to find, measure, count, and accurately describe these things through their research. HOW?? Positivism Key principles: Generalization/Grand Theories: Aim at explain and predict social phenomena by discovering empirical regularities, formulating law-like generalizations and establishing causal relationships. Eg. Realism and ‘Balance of Power’ theory Eg. Liberalism and ‘Democratic Peace’ theory Empirical Verification: statements can be believed & accepted to the extent that they are derived from empirical evidence Values: aspiration/claim to value-free form of enquiry. RESEARCH METHODS A POSITIVIST MIGHT USE:SurveysInterviewsFocus GroupsEthnographyParticipant ObservationTextual AnalysisCritical Discourse
  • 55. AnalysisStatistical Analysis Post-Positivism (‘interpretivism’) Critique of Positivism: Nowhere in social sciences do we find empirical generalizations with the level of precision and confirmation enjoyed by ‘natural’ sciences. The social/political world is not straightforwardly perceivable because we are a part of it. It’s not simply ‘out there’; it is different for each of us, with things, words, and events carrying different meanings in every case (we are in it). Arguments: Human action (social and political phenomenon included) can only be interpreted from the point of view of the actors. It cannot therefore be adequately studied using the methods of ‘hard’ sciences, with talk of variables and quantification. WHY?? Post-Positivist Epistemology and Ontology Epistemology: Theory of knowledge. Knowledge is imbued with power (Power/Knowledge) and inherently political.
  • 56. There is no clear, disinterested knowledge – people have experiences, feelings, and understandings that effect the ways that they perceive and interpret the world. Not only is it impossible to eliminate these but they are the stuff out of which the world is made. Ontology: Theory of things that have being/exist. Things come into being and are known as such as a result of operations of power. HOW?? Post-Positivism (‘interpretivism’) Key principles: interested in people and the way that they interrelate – what they think and how they form ideas about the world; how their worlds are constructed. not be trying to be objective or ‘neutral’; rather, you will be accepting the centrality of subjectivity. RESEARCH METHODS A POST-POSITIVIST MIGHT USE:SurveysInterviewsFocus GroupsEthnographyParticipant ObservationTextual AnalysisCritical Discourse AnalysisStatistical Analysis
  • 57. Your First Task Decide on a broad research topic Write a few sentences on what interests you about it Upload this to Moodle by Friday (25th Jan) at 4pm Some Research Topics Voting behavior Social movements Climate Change Governance War (past or present) Terrorism Counterterrorism Democracy International Institutions Security International Trade International Finance Financial Crisis Militarism Human Rights *
  • 58. Task for next week (Formulating a Research Question w/Stefano P) Start brainstorming research questions Open a word document and jot them down every time you think of one Any Questions? Saylor URL: http://www.saylor.org/books Saylor.org 1 This text was adapted by The Saylor Foundation under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work’s original creator or licensee.
  • 59. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://creativecommons.org/licenses/by-nc-sa/3.0/ http://creativecommons.org/licenses/by-nc-sa/3.0/ Saylor URL: http://www.saylor.org/books Saylor.org 2 Preface Teaching strategic management classes can be a very difficult challenge for professors. In most business schools, strategic management is a “capstone” course that requires students to draw on insights from various functional courses they have completed (such as marketing, finance, and accounting) to understand how top executives make the strategic
  • 60. decisions that drive whether organizations succeed or fail. Many students have very little experience with major organizational choices. This undermines many students’ engagement in the course. Our book is designed to enhance student engagement. A good product in any industry matches what customers want and need, and the textbook industry is no exception. It is well documented that many of today’s students are visual learners. To meet students’ wants and needs (and thereby create a much better teaching experience for professors), our book offers the following: • Several graphic displays in each chapter that summarize key concepts in a visually appealing format.Chapter 1 "Mastering Strategy: Art and Science", for example, offers graphic
  • 61. displays on (1) the “5 Ps” of strategy; (2) intended, emergent, and realized strategies; (3) strategy in ancient times; (4) military strategy; and (5) the evolution of strategic management as a field of study. The idea for the graphic displays was inspired by the visually rich and popular series on business published by DK Publishing. • Rich, illustrative examples drawn from companies that are relevant to many students. As part of our emphasis on examples, each chapter uses one company as an ongoing example to bring various concepts to life. In Chapter 1 "Mastering Strategy: Art and Science", Apple is used as the ongoing example. • A “strategy at the movies” feature in each chapter that links course concepts with a
  • 62. popular motion picture. In Chapter 1 "Mastering Strategy: Art and Science", for example, we describe how The Social Network illustrates intended, emergent, and realized strategies. Politicians in many states are paying more and more attention over time to the cost of a college education, including the high prices of most textbooks. It is therefore reasonable to expect an ever- increasing number of professors to seek modestly priced textbooks. Professors still want to be http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 3 assured of quality, of course. Both of us are endowed chairs at Research I universities. We have long
  • 63. track records of publishing our research in premier journals, and we have served in a variety of editorial and review board roles for such journals. Finally, we recognize that professors want to minimize their switching costs when adopting a new book. Although every textbook is a little unique, our table of contents offers a structure and topic coverage that parallels what market leading books provide. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 4 Chapter 1
  • 64. Mastering Strategy: Art and Science L E A R N I N G O B J E C T I V E S After reading this chapter, you should be able to understand and articulate answers to the following questions: 1. What are strategic management and strategy? 2. Why does strategic management matter? 3. What elements determine firm performance? Strategic Management: A Core Concern for Apple The Opening of the Apple Store Image courtesy of Neil Bird,
  • 65. http://www.flickr.com/photos/nechbi/2058929337. March 2, 2011, was a huge day for Apple. The firm released its much-anticipated iPad2, a thinner and faster version of market-leading Apple’s iPad tablet device. Apple also announced that a leading publisher, Random House, had made all seventeen thousand of its books available through Apple’s iBookstore. Apple had enjoyed tremendous success for quite some time. Approximately fifteen million iPads were sold in 2010, and the price of Apple’s stock had more than tripled from early 2009 to early 2011. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://www.flickr.com/photos/nechbi/2058929337 Saylor URL: http://www.saylor.org/books Saylor.org 5
  • 66. But future success was far from guaranteed. The firm’s visionary founder Steve Jobs was battling serious health problems. Apple’s performance had suffered when an earlier health crisis had forced Jobs to step away from the company. This raised serious questions. Would Jobs have to step away again? If so, how might Apple maintain its excellent performance without its leader? Meanwhile, the iPad2 faced daunting competition. Samsung, LG, Research in Motion, Dell, and other manufacturers were trying to create tablets that were cheaper, faster, and more versatile than the iPad2. These firms were eager to steal market share by selling their tablets to current and potential Apple customers. Could Apple maintain leadership of the tablet market, or would one or more of its rivals dominate the market in the years ahead? Even worse, might a
  • 67. company create a new type of device that would make Apple’s tablets obsolete? http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 6 1.1 Defining Strategic Management and Strategy L E A R N I N G O B J E C T I V E S 1. Learn what strategic management is. 2. Understand the key question addressed by strategic management. 3. Understand why it is valuable to consider different definitions of strategy.
  • 68. 4. Learn what is meant by each of the 5 Ps of strategy. What Is Strategic Management? Issues such as those currently faced by Apple are the focus of strategic management because they help answer the key question examined by strategic management— “Why do some firms outperform other firms?” More specifically, strategic management examines how actions and events involving top executives (such as Steve Jobs), firms (Apple), and industries (the tablet market) influence a firm’s success or failure. Formal tools exist for understanding these relationships, and many of these tools are explained and applied in this book. But formal tools are not enough; creativity is just as important to strategic management. Mastering strategy is therefore part art and part science.
  • 69. This introductory chapter is intended to enable you to understand what strategic management is and why it is important. Because strategy is a complex concept, we begin by explaining five different ways to think about what strategy involves (Figure 1.1 "Defining Strategy: The Five Ps"). Next, we journey across many centuries to examine the evolution of strategy from ancient times until today. We end this chapter by presenting a conceptual model that maps out one way that executives can work toward mastering strategy. The model also provides an overall portrait of this book’s contents by organizing the remaining nine chapters into a coherent whole. Defining Strategy: The Five Ps Defining strategy is not simple. Strategy is a complex concept that involves many different processes and
  • 70. activities within an organization. To capture this complexity, Professor Henry Mintzberg of McGill University in Montreal, Canada, articulated what he labeled as “the 5 Ps of strategy.” According to Mintzberg, understanding how strategy can be viewed as a plan, as a ploy, as a position, as a pattern, and http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 7 as a perspective is important. Each of these five ways of thinking about strategy is necessary for understanding what strategy is, but none of them alone is sufficient to master the concept. [1] Figure 1.1 Defining Strategy: The Five Ps
  • 71. Images courtesy of Thinkstock (first); Dave, K., Short, J., Combs, J., & Terrell, W. (2011). Tales of Garcón: The Franchise Players. Irvington, Wikipedia (third); Old Navy (fourth); James Duncan Davidson from Portland, USA (fifth). Strategy as a Plan http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 8 Strategic plans are the essence of strategy, according to one classic view of strategy. A strategic plan is a carefully crafted set of steps that a firm intends to follow to be successful. Virtually every organization creates a strategic plan to guide its future. In 1996, Apple’s performance was not strong, and Gilbert F.
  • 72. Amelio was appointed as chief executive officer in the hope of reversing the company’s fortunes. In a speech focused on strategy, Amelio described a plan that centered on leveraging the Internet (which at the time was in its infancy) and developing multimedia products and services. Apple’s subsequent success selling over the Internet via iTunes and with the iPad can be traced back to the plan articulated in 1996. [2] A business model should be a central element of a firm’s strategic plan. Simply stated, a business model describes the process through which a firm hopes to earn profits. It probably won’t surprise you to learn that developing a viable business model requires that a firm sell goods or services for more than it costs the firm to create and distribute those goods. A more subtle but equally important aspect of a business
  • 73. model is providing customers with a good or service more cheaply than they can create it themselves. Consider, for example, large chains of pizza restaurants such as Papa John’s and Domino’s. Franchises such as Pizza Hut provide an example of a popular business model that has been successful worldwide. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 9 Image courtesy of Derek Jensen, http://wikimediafoundation.org/wiki/File:Bremen-indiana-pizza- hut.jpg. Because these firms buy their ingredients in massive quantities, they pay far less for these items than any family could (an advantage called economies of scale).
  • 74. Meanwhile, Papa John’s and Domino’s have developed specialized kitchen equipment that allows them to produce better-tasting pizza than can be created using the basic ovens that most families rely on for cooking. Pizza restaurants thus can make better-tasting pizzas for far less cost than a family can make itself. This business model provides healthy margins and has enabled Papa John’s and Domino’s to become massive firms. Strategic plans are important to individuals too. Indeed, a well- known proverb states that “he who fails to plan, plans to fail.” In other words, being successful requires a person to lay out a path for the future and then follow that path. If you are reading this, earning a college degree is probably a key step in your strategic plan for your career. Don’t be concerned if your plan is not fully developed, however. Life is full
  • 75. of unexpected twists and turns, so maintaining flexibility is wise for individuals planning their career strategies as well as for firms. For firms, these unexpected twists and turns place limits on the value of strategic planning. Former heavyweight boxing champion Mike Tyson captured the limitations of strategic plans when he noted, “Everyone has a plan until I punch them in the face.” From that point forward, strategy is less about a plan and more about adjusting to a shifting situation. For firms, changes in the behavior of competitors, customers, suppliers, regulators, and other external groups can all be sources of a metaphorical punch in the face. As events unfold around a firm, its strategic plan may reflect a competitive reality that no longer exists. Because the landscape of business changes rapidly, other
  • 76. ways of thinking about strategy are needed. Strategy as a Ploy A second way to view strategy is in terms of ploys. A strategic ploy is a specific move designed to outwit or trick competitors. Ploys often involve using creativity to enhance success. One such case involves the mighty Mississippi River, which is a main channel for shipping cargo to the central portion of the United http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://wikimediafoundation.org/wiki/File:Bremen-indiana-pizza- hut.jpg Saylor URL: http://www.saylor.org/books Saylor.org 10 States. Ships traveling the river enter it near New Orleans,
  • 77. Louisiana. The next major port upriver is Louisiana’s capital, Baton Rouge. A variety of other important ports exist in states farther upriver. Many decades ago, the governor of Louisiana was a clever and controversial man named Huey Long. Legend has it that Long ordered that a bridge being constructed over the Mississippi River in Baton Rouge be built intentionally low to the ground. This ploy created a captive market for cargo because very large barges simply could not fit under the bridge. Large barges using the Mississippi River thus needed to unload their cargo in either New Orleans or Baton Rouge. Either way, Louisiana would benefit. Of course, owners of ports located farther up the river were not happy. Ploys can be especially beneficial in the face of much stronger opponents. Military history offers quite a
  • 78. few illustrative examples. Before the American Revolution, land battles were usually fought by two opposing armies, each of which wore brightly colored clothing, marching toward each other across open fields. George Washington and his officers knew that the United States could not possibly defeat better- trained and better-equipped British forces in a traditional battle. To overcome its weaknesses, the American military relied on ambushes, hit-and-run attacks, and other guerilla moves. It even broke an unwritten rule of war by targeting British officers during skirmishes. This was an effort to reduce the opponent’s effectiveness by removing its leadership. Centuries earlier, the Carthaginian general Hannibal concocted perhaps the most famous ploy ever. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books
  • 79. Saylor URL: http://www.saylor.org/books Saylor.org 11 Hannibal’s clever use of elephants to cross the Alps provides an example of a strategic ploy. Image courtesy of Wikipedia, http://en.wikipedia.org/wiki/File:Hannibal3.jpg. Carthage was at war with Rome, a scary circumstance for most Carthaginians given their far weaker fighting force. The Alps had never been crossed by an army. In fact, the Alps were considered such a treacherous mountain range that the Romans did not bother monitoring the part of their territory that bordered the Alps. No horse was up to the challenge, but Hannibal cleverly put his soldiers on elephants, and his army was able to make the mountain crossing. The
  • 80. Romans were caught completely unprepared and most of them were frightened by the sight of charging elephants. By using the element of surprise, Hannibal was able to lead his army to victory over a much more powerful enemy. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://en.wikipedia.org/wiki/File:Hannibal3.jpg Saylor URL: http://www.saylor.org/books Saylor.org 12 Ploys continue to be important today. In 2011, a pizzeria owner in Pennsylvania was accused of making a rather unique attempt to outmaneuver two rival pizza shops. According to police, the man tried to sabotage his competitors by placing mice in their pizzerias. If the ploy had not been discovered, the two
  • 81. shops could have suffered bad publicity or even been shut down by authorities because of health concerns. Although most strategic ploys are legal, this one was not, and the perpetrator was arrested. [3] Strategy as a Pattern Strategy as pattern is a third way to view strategy. This view focuses on the extent to which a firm’s actions over time are consistent. A lack of a strategic pattern helps explain why Kmart deteriorated into bankruptcy in 2002. The company was started in the late nineteenth century as a discount department store. By the middle of the twentieth century, consistently working to be good at discount retailing had led Kmart to become a large and prominent chain. By the 1980s, however, Kmart began straying from its established strategic pattern. Executives shifted the
  • 82. firm’s focus away from discount retailing and toward diversification. Kmart acquired large stakes in chains involved in sporting goods (Sports Authority), building supplies (Builders Square), office supplies (OfficeMax), and books (Borders). In the 1990s, a new team of executives shifted Kmart’s strategy again. Brands other than Kmart were sold off, and Kmart’s strategy was adjusted to emphasize information technology and supply chain management. The next team of executives decided that Kmart’s strategy would be to compete directly with its much-larger rival, Walmart. The resulting price war left Kmart crippled. Indeed, this last shift in strategy was the fatal mistake that drove Kmart into bankruptcy. Today, Kmart is part of Sears Holding Company, and its prospects remain uncertain. In contrast, Apple is very consistent in its strategic pattern: It
  • 83. always responds to competitive challenges by innovating. Some of these innovations are complete busts. Perhaps the best known was the Newton, a tablet-like device that may have been ahead of its time. Another was the Pippin, a video game system introduced in 1996 to near-universal derision. Apple TV, a 2007 offering intended to link televisions with the Internet, also failed to attract customers. Such failures do not discourage Apple, however, and enough of its innovations are successful that Apple’s overall performance is excellent. However, there are risks to http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 13 following a pattern too closely. A consistent pattern can make a
  • 84. company predictable, a possibility that Apple must guard against in the years ahead. Strategy as a Position Viewing strategy as a plan, a ploy, and a pattern involve only the actions of a single firm. In contrast, the next P—strategy as position—considers a firm and its competitors. Specifically, strategy as position refers to a firm’s place in the industry relative to its competitors. McDonald’s, for example, has long been and remains the clear leader among fast-food chains. This position offers both good and bad aspects for McDonald’s. One advantage of leading an industry is that many customers are familiar with and loyal to leaders. Being the market leader, however, also makes McDonald’s a target for rivals such as Burger King and Wendy’s. These firms create their strategies with
  • 85. McDonald’s as a primary concern. Old Navy offers another example of strategy as position. Old Navy has been positioned to sell fashionable clothes at competitive prices. Old Navy occupies a unique position as the low-cost strategy within the Gap Inc.’s fleet of brands. Image courtesy of Lindsey Turner, http://www.flickr.com/photos/theogeo/2148416495. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://www.flickr.com/photos/theogeo/2148416495 Saylor URL: http://www.saylor.org/books Saylor.org 14 Old Navy is owned by the same corporation (Gap Inc.) as the midlevel brand the Gap and upscale brand
  • 86. Banana Republic. Each of these three brands is positioned at a different pricing level. The firm hopes that as Old Navy’s customers grow older and more affluent, they will shop at the Gap and then eventually at Banana Republic. A similar positioning of different brands is pursued by General Motors through its Chevrolet (entry level), Buick (midlevel), and Cadillac (upscale) divisions. Firms can carve out a position by performing certain activities in a different manner than their rivals. For example, Southwest Airlines is able to position itself as a lower-cost and more efficient provider by not offering meals that are common among other airlines. In addition, Southwest does not assign specific seats. This allows for faster loading of passengers. Positioning a firm in this manner can only be accomplished when managers make trade-offs that cut off
  • 87. certain possibilities (such as offering meals and assigned seats) to place their firms in a unique strategic space. When firms position themselves through unique goods and services customers value, business often thrives. But when firms try to please everyone, they often find themselves without the competitive positioning needed for long-term success. Thus deciding what a firm is not going to do is just as important to strategy as deciding what it is going to do. [4] To gain competitive advantage and greater success, firms sometimes change positions. But this can be a risky move. Winn-Dixie became a successful grocer by targeting moderate-income customers. When the firm abandoned this established position to compete for wealthier customers and higher margins, the results were disastrous. The firm was forced into bankruptcy and closed many stores. Winn-Dixie
  • 88. eventually exited bankruptcy, but like Kmart, its future prospects are unclear. In contrast to firms such as Winn-Dixie that change positions, Apple has long maintained a position as a leading innovator in various industries. This positioning has served Apple well. Strategy as a Perspective The fifth and final P shifts the focus to inside the minds of the executives running a firm. Strategy as perspective refers to how executives interpret the competitive landscape around them. Because each person is unique, two different executives could look at the same event—such as a new competitor emerging—and attach different meanings to it. One might just see a new threat to his or her firm’s sales; the other might view the newcomer as a potential ally.
  • 89. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 15 An old cliché urges listeners to “make lemons into lemonade.” A good example of applying this idea through strategy as perspective is provided by local government leaders in Sioux City, Iowa. Rather than petition the federal government to change their airport’s unusual call sign—SUX—local leaders decided to leverage the call sign to attract the attention of businesses and tourists to build their city’s economic base. An array of clothing and other goods sporting the SUX name is available at http://www.flysux.com. Some strategists such as these local leaders are willing to take a seemingly sour situation and see the potential
  • 90. sweetness, while other executives remain fixated on the sourness. Executives who adopt unique and positive perspectives can lead firms to find and exploit opportunities that others simply miss. In the mid-1990s, the Internet was mainly a communication tool for academics and government agencies. Jeff Bezos looked beyond these functions and viewed the Internet as a potential sales channel. After examining a number of different markets that he might enter using the Internet, Bezos saw strong profit potential in the bookselling business, and he began selling books online. Today, the company he created—Amazon—has expanded far beyond its original focus on books to become a dominant retailer in countless different markets. The late Steve Jobs at Apple appeared to take a similar
  • 91. perspective; he saw opportunities where others could not, and his firm has reaped significant benefits as a result. K E Y T A K E A W A Y • Strategic management focuses on firms and the different strategies that they use to become and remain successful. Multiple views of strategy exist, and the 5 Ps described by Henry Mintzberg enhance understanding of the various ways in which firms conceptualize strategy. E X E R C I S E S 1. Have you developed a strategy to manage your career? Should you make it more detailed? Why or why not?
  • 92. 2. Identify an example of each of the 5 Ps of strategy other than the examples offered in this section. 3. What business that you visit regularly seems to have the most successful business model? What makes the business model work? http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://www.flysux.com/ Saylor URL: http://www.saylor.org/books Saylor.org 16 [1] Mintzberg, H. 1987. The strategy concept I: Five Ps for strategy. California Management Review, 30(1), 11–24. [2] Markoff, J. 1996, May 14. Apple unveils strategic plan of small steps. New York Times. Retrieved from http://www.nytimes.com/1996/05/14/business/apple- unveils-strategic -plan-of-small-steps.html
  • 93. [3] Reuters. 2011, March 1. Philadelphia area pizza owner used mice vs. competition—police. Retrieved from news.yahoo.com/s/nm/20110301/od_uk_nm/oukoe_uk_crime_pi zza [4] Porter, M. E. 1996, November–December. What is strategy? Harvard Business Review, 61–79. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://www.nytimes.com/1996/05/14/business/apple-unveils- strategic-plan-of-small-steps.html Saylor URL: http://www.saylor.org/books Saylor.org 17 1.2 Intended, Emergent, and Realized Strategies L E A R N I N G O B J E C T I V E S
  • 94. 1. Learn what is meant by intended and emergent strategies and the differences between them. 2. Understand realized strategies and how they are influenced by intended, deliberate, and emergent strategies. A few years ago, a consultant posed a question to thousands of executives: “Is your industry facing overcapacity and fierce price competition?” All but one said “yes.” The only “no” came from the manager of a unique operation—the Panama Canal! This manager was fortunate to be in charge of a venture whose services are desperately needed by shipping companies and that offers the only simple route linking the Atlantic and Pacific Oceans. The canal’s success could be threatened if transoceanic shipping was to cease or if a new canal were built. Both of these possibilities are extremely remote,
  • 95. however, so the Panama Canal appears to be guaranteed to have many customers for as long as anyone can see into the future. When an organization’s environment is stable and predictable, strategic planning can provide enough of a strategy for the organization to gain and maintain success. The executives leading the organization can simply create a plan and execute it, and they can be confident that their plan will not be undermined by changes over time. But as the consultant’s experience shows, only a few executives—such as the manager of the Panama Canal—enjoy a stable and predictable situation. Because change affects the strategies of almost all organizations, understanding the concepts of intended, emergent, and realized strategies is important (Figure
  • 96. 1.2 "Strategic Planning and Learning: Intended, Emergent, and Realized Strategies"). Also relevant are deliberate and nonrealized strategies. The relationships among these five concepts are presented in Figure 1.3 "A Model of Intended, Deliberate, and Realized Strategy". [1] Figure 1.2 Strategic Planning and Learning: Intended, Emergent, and Realized Strategies Intended and Emergent Strategies Figure 1.3 A Model of Intended, Deliberate, and Realized Strategy http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 18
  • 97. Reproduced with permission An intended strategy is the strategy that an organization hopes to execute. Intended strategies are usually described in detail within an organization’s strategic plan. When a strategic plan is created for a new venture, it is called a business plan. As an undergraduate student at Yale in 1965, Frederick Smith had to complete a business plan for a proposed company as a class project. His plan described a delivery system that would gain efficiency by routing packages through a central hub and then pass them to their destinations. A few years later, Smith started Federal Express (FedEx), a company whose strategy closely followed the plan laid out in his class project. Today, Frederick Smith’s personal wealth has surpassed $2 billion, and FedEx ranks eighth among the World’s Most
  • 98. Admired Companies according to Fortune magazine. Certainly, Smith’s intended strategy has worked out far better than even he could have dreamed.[2] Emergent strategy has also played a role at Federal Express. An emergent strategy is an unplanned strategy that arises in response to unexpected opportunities and challenges. Sometimes emergent strategies result in disasters. In the mid-1980s, FedEx deviated from its intended strategy’s focus on package delivery to capitalize on an emerging technology: facsimile (fax) machines. The firm developed a service called ZapMail that involved documents being sent electronically via fax machines between FedEx http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books
  • 99. Saylor URL: http://www.saylor.org/books Saylor.org 19 offices and then being delivered to customers’ offices. FedEx executives hoped that ZapMail would be a success because it reduced the delivery time of a document from overnight to just a couple of hours. Unfortunately, however, the ZapMail system had many technical problems that frustrated customers. Even worse, FedEx failed to anticipate that many businesses would simply purchase their own fax machines. ZapMail was shut down before long, and FedEx lost hundreds of millions of dollars following its failed emergent strategy. In retrospect, FedEx had made a costly mistake by venturing outside of the domain that was central to its intended strategy: package delivery. [3]
  • 100. Emergent strategies can also lead to tremendous success. Southern Bloomer Manufacturing Company was founded to make underwear for use in prisons and mental hospitals. Many managers of such institutions believe that the underwear made for retail markets by companies such as Calvin Klein and Hanes is simply not suitable for the people under their care. Instead, underwear issued to prisoners needs to be sturdy and durable to withstand the rigors of prison activities and laundering. To meet these needs, Southern Bloomers began selling underwear made of heavy cotton fabric. An unexpected opportunity led Southern Bloomer to go beyond its intended strategy of serving institutional needs for durable underwear. Just a few years after opening, Southern Bloomer’s performance was excellent. It was servicing the needs of about
  • 101. 125 facilities, but unfortunately, this was creating a vast amount of scrap fabric. An attempt to use the scrap as stuffing for pillows had failed, so the scrap was being sent to landfills. This was not only wasteful but also costly. One day, cofounder Don Sonner visited a gun shop with his son. Sonner had no interest in guns, but he quickly spotted a potential use for his scrap fabric during this visit. The patches that the gun shop sold to clean the inside of gun barrels were of poor quality. According to Sonner, when he “saw one of those flimsy woven patches they sold that unraveled when you touched them, I said, ‘Man, that’s what I can do’” with the scrap fabric. Unlike other gun-cleaning patches, the patches that Southern Bloomer sold did not give off threads or lint, two by-products that hurt guns’ accuracy and reliability. The patches quickly
  • 102. became popular with the military, police departments, and individual gun enthusiasts. Before long, Southern Bloomer was selling thousands of pounds of patches per month. A casual trip to a gun store unexpectedly gave rise to a lucrative emergent strategy. [4] http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 20 Realized Strategy A realized strategy is the strategy that an organization actually follows. Realized strategies are a product of a firm’s intended strategy (i.e., what the firm planned to do), the firm’s deliberate strategy (i.e., the parts of the intended strategy that the firm continues to pursue over
  • 103. time), and its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and challenges). In the case of FedEx, the intended strategy devised by its founder many years ago—fast package delivery via a centralized hub—remains a primary driver of the firm’s realized strategy. For Southern Bloomers Manufacturing Company, realized strategy has been shaped greatly by both its intended and emergent strategies, which center on underwear and gun-cleaning patches. In other cases, firms’ original intended strategies are long forgotten. A nonrealized strategy refers to the abandoned parts of the intended strategy. When aspiring author David McConnell was struggling to sell his books, he decided to offer complimentary perfume as a sales gimmick. McConnell’s books never did
  • 104. escape the stench of failure, but his perfumes soon took on the sweet smell of success. The California Perfume Company was formed to market the perfumes; this firm evolved into the personal care products juggernaut known today as Avon. For McConnell, his dream to be a successful writer was a nonrealized strategy, but through Avon, a successful realized strategy was driven almost entirely by opportunistically capitalizing on change through emergent strategy. Strategy at the Movies The Social Network Did Harvard University student Mark Zuckerberg set out to build a billion-dollar company with more than six hundred million active users? Not hardly. As shown in 2010’s The Social Network, Zuckerberg’s
  • 105. original concept in 2003 had a dark nature. After being dumped by his girlfriend, a bitter Zuckerberg created a website called “FaceMash” where the attractiveness of young women could be voted on. This evolved first into an online social network called Thefacebook that was for Harvard students only. When the network became surprisingly popular, it then morphed into Facebook, a website open to everyone. Facebook is so pervasive today that it has changed the way we speak, such as the word friend being used http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 21 as a verb. Ironically, Facebook’s emphasis on connecting with existing and new friends is about as
  • 106. different as it could be from Zuckerberg’s original mean- spirited concept. Certainly, Zuckerberg’s emergent and realized strategies turned out to be far nobler than the intended strategy that began his adventure in entrepreneurship. The Social Network demonstrates how founder Mark Zuckerberg’s intended strategy gave way to an emergent strategy via the creation of Facebook. Image courtesy of Robert Scoble, http://www.flickr.com/photos/scobleizer/5179377698. K E Y T A K E A W A Y • Most organizations create intended strategies that they hope to follow to be successful. Over time, however, changes in an organization’s situation give rise to new opportunities and challenges.
  • 107. Organizations respond to these changes using emergent strategies. Realized strategies are a product of both intended and realized strategies. E X E R C I S E S 1. What is the difference between an intended and an emergent strategy? 2. Can you think of a company that seems to have abandoned its intended strategy? Why do you suspect it was abandoned? http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://www.flickr.com/photos/scobleizer/5179377698 Saylor URL: http://www.saylor.org/books Saylor.org 22
  • 108. 3. Would you describe your career strategy in college to be more deliberate or emergent? Why? [1] Mintzberg, H., & Waters, J. A. 1985. Of strategies, deliberate and emergent. Strategic Management Journal, 6, 257–272. [2] Donahoe, J. A. 2011, March 10. Forbes: Fred Smith’s fortune grows to $.21B. Memphis Business Journal. Retrieved fromhttp://www.bizjournals.com/memphis/news/2011/03/10/for bes-fred-smiths-fortune-grows- to.html; Fortune: FedEx 8th “most admired” company in the world. Memphis Business Journal. Retrieved from http://www.bizjournals .com/memphis/news/2011/03/03/fortune-fedex-8th-most- admired.html [3] Funding Universe. FedEx Corporation. Retrieved fromhttp://www.fundinguniverse.com/company -
  • 109. histories/FedEx-Corporation-Company-History.html [4] Wells, K. 2002. Floating off the page: The best stories from the Wall Street Journal’s middle column. New York: Simon & Shuster. Quote from page 97. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books http://www.bizjournals.com/memphis/news/2011/03/10/forbes- fred-smiths-fortune-grows-to.html http://www.bizjournals.com/memphis/news/2011/03/10/forbes- fred-smiths-fortune-grows-to.html http://www.bizjournals.com/memphis/news/2011/03/03/fortune- fedex-8th-most-admired.html http://www.fundinguniverse.com/company-histories/FedEx- Corporation-Company-History.html http://www.fundinguniverse.com/company-histories/FedEx- Corporation-Company-History.html Saylor URL: http://www.saylor.org/books Saylor.org 23
  • 110. 1.3 The History of Strategic Management L E A R N I N G O B J E C T I V E S 1. Consider how strategy in ancient times and military strategy can provide insights to businesses. 2. Describe how strategic management has evolved into a field of study. Those who cannot remember the past are condemned to repeat it. - George Santayana, The Life of Reason Santayana’s quote has strong implications for strategic management. The history of strategic management can be traced back several thousand years. Great wisdom about strategy can be acquired by understanding the past, but ignoring the lessons of history can lead to costly strategic mistakes that could
  • 111. have been avoided. Certainly, the present offers very important lessons; businesses can gain knowledge about what strategies do and do not work by studying the current actions of other businesses. But this section discusses two less obvious sources of wisdom: (1) strategy in ancient times and (2) military strategy. This section also briefly traces the development of strategic management as a field of study. Strategy in Ancient Times Perhaps the earliest-known discussion of strategy is offered in the Old Testament of the Bible. [1] Approximately 3,500 years ago, Moses faced quite a challenge after leading his fellow Hebrews out of enslavement in Egypt. Moses was overwhelmed as the lone strategist at the helm of a nation that may have exceeded one million people. Based on advice from
  • 112. his father-in-law, Moses began delegating authority to other leaders, each of whom oversaw a group of people. This hierarchical delegation of authority created a command structure that freed Moses to concentrate on the biggest decisions and helped him implement his strategies (Figure 1.4 "Strategy in Ancient Times"). Similarly, the demands of strategic management today are simply too much for a chief executive officer (the top leader of a company) to handle alone. Many important tasks are thus entrusted to vice presidents and other executives. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 24
  • 113. In ancient China, strategist and philosopher Sun Tzu offered thoughts on strategy that continue to be studied carefully by business and military leaders today. Sun Tzu’s best-known work is The Art of War. As this title implies, Sun Tzu emphasized the creative and deceptive aspects of strategy. One of Sun Tzu’s ideas that has numerous business applications is that winning a battle without fighting is the best way to win. Apple’s behavior in the personal computer business offers a good example of this idea in action. Many computer makers such as Toshiba, Acer, and Lenovo compete with one another based primarily on price. This leads to price wars that undermine the computer makers’ profits. In contrast, Apple prefers to develop unique features for its computers, features that have created a fiercely loyal set of
  • 114. customers. Apple boldly charges far more for its computers than its rivals charge for theirs. Apple does not even worry much about whether its computers’ software is compatible with the software used by most other computers. Rather than fighting a battle with other firms, Apple wins within the computer business by creating its own unique market and by attracting a set of loyal customers. Sun Tzu would probably admire Apple’s approach. Perhaps the most famous example of strategy in ancient times revolves around the Trojan horse. According to legend, Greek soldiers wanted to find a way to enter the gates of Troy and attack the city from the inside. They devised a ploy that involved creating a giant wooden horse, hiding soldiers inside the horse, and offering the horse to the Trojans as a gift. The Trojans were fooled and brought the horse
  • 115. inside their city. When night arrived, the hidden Greek soldiers opened the gates for their army, leading to a Greek victory. In modern times, the term Trojan horse refers to gestures that appear on the surface to be beneficial to the recipient but that mask a sinister intent. Computer viruses also are sometimes referred to as Trojan horses. A far more noble approach to strategy than the Greeks’ is attributed to King Arthur of Britain. Unlike the hierarchical approach to organizing Moses used, Arthur allegedly considered himself and each of his knights to have an equal say in plotting the group’s strategy. Indeed, the group is thought to have held its meetings at a round table so that no voice, including Arthur’s, would be seen as more important than the others. The choice of furniture in modern executive suites is
  • 116. perhaps revealing. Most feature rectangular meeting tables, perhaps signaling that one person—the chief executive officer—is in charge. http://creativecommons.org/licenses/by-nc-sa/3.0/ http://www.saylor.org/books Saylor URL: http://www.saylor.org/books Saylor.org 25 Another implication for strategic management offered by King Arthur and his Knights of the Round Table involves the concept of mission. Their vigorous search to find the Holy Grail (the legendary cup used by Jesus and his disciples at the Last Supper) serves as an exemplar for the importance of a central mission to guide organizational strategy and actions. Lessons Offered by Military Strategy
  • 117. Key military conflicts and events have shaped the understanding of strategic management (Figure 1.5 "Classic Military Strategy"). Indeed, the word strategy has its roots in warfare. The Greek verb strategos means “army leader” and the idea of stratego (from which we get the word strategy) refers to defeating an enemy by effectively using resources. [2] A book written nearly five hundred years ago is still regarded by many as an insightful guide for conquering and ruling territories. Niccolò Machiavelli’s 1532 book The Prince offers clever recipes for success to government leaders. Some of the book’s suggestions are quite devious, and the word Machiavellianis used today to refer to acts of deceit and manipulation. Two wars fought on American soil provide important lessons about strategic management. In the late