Defines common ground at the interface of strategy and management science and unites the topics with an original approach vital for strategy students, researchers and managers
Strategic Analytics: Integrating Management Science and Strategy combines strategy content with strategy process through the lenses of management science, masterfully defining the common ground that unites both fields. Each chapter starts with the perspective of a certain strategy problem, such as competition, but continues with an explanation of the strategy process using management science tools such as simulation. Facilitating the process of strategic decision making through the lens of management science, the author integrates topics that are usually in conflict for MBAs: strategy and quantitative methods. Strategic Analytics features multiple international real-life case studies and examples, business issues for further research and theory review questions and exercises at the end of each chapter.
Strategic Analytics starts by introducing readers to strategic management. It then goes on to cover: managerial capabilities for a complex world; politics, economy, society, technology, and environment; external environments known as exogenous factors (PESTE) and endogenous factors (industry); industry dynamics; industry evolution; competitive advantage; dynamic resource management; organisational design; performance measurement system; the life cycle of organisations from start-ups; maturity for maintaining profitability and growth; and finally, regeneration.
- Developed from the author's own Strategy Analytics course at Warwick Business School, personal experience as consultant, and in consultation with other leading scholars
- Uses management science to facilitate the process of strategic decision making
- Chapters structured with chapter objectives, summaries, short case studies, tables, student exercises, references and management science models
- Accompanied by a supporting website
Aimed at both academics and practitioners, Strategic Analytics is an ideal text for postgraduates and advanced undergraduate students of business and management.
Table of Contents
About the Companion website xi
1 Introduction to Strategic Analytics 1
1.1 What is Analytics? 3
1.2 What is Management Science? 10
1.3 What is Information Technology: New Challenges? 18
1.4 What is Strategic Management? 22
1.4.1 What are the Characteristics of Strategic Problems? 24
1.5 Strategy Analytics: Integrating Management Science with Strategic Management 28
References 31
2 Dynamic Managerial Capabilities for a Complex World Under Big Data 35
2.1 Dynamic Managerial Capabilities 36
2.1.1 Task Dimension 37
2.1.2 Cognitive Dimension 39
2.1.3 Behavior Dimension 39
2.2 Integrating Management Science and Strategic Management: Managers as Modelers 42
2.2.1 Modeling 43
2.2.2 Behavior with and Beyond Models 44
2.2.3 Modeling Systems 45
2.2.4 Big Data Analytics Capabilities 47
2.3 End of Chapter 48
2.3.1 Revision Questions 49
2.3.2 Case Study: The Future of Strategizing 49
References 50
Further Reading 54
3 External Environment: Political, Economic, Societal, Technological and Environmental Factors 55
3.1 The PESTE Analysis 57
3.1.1 Limitations of PESTE Analysis 58
3.2 Integrating Management Science in the Strategic Management Process 61
3.2.1 Achieving Consistency in PESTE Analysis Using the Analytic Hierarchy Process 65
3.2.2 Understanding the Evolution of PESTE Factors Using Visualization Analytics 73
3.3 End of Chapter 74
3.4.1 Revision Questions 75
3.4.2 Case Study: Westmill Co‐op and the Rise of Renewable Energy 75
References 76
Further Reading 78
4 Industry Dynamics 79
4.1 Defining the Industry 80
4.2 Porter’s Five Forces and Industry Dynamics 80
4.2.1 Bargaining Power of Suppliers 81
4.2.2 Bargaining Power of Buyers 82
4.2.3 Substitutes 83
4.2.4 Threat of New Entrants 84
4.2.5 Intensity of Rivalry 85
4.2.6 Strategic Issues Derived from Five Forces Analysis 86
4.3 Integrating Management Science into Strategic Management 91
4.3.1 Revenue Management 91
4.3.2 Evaluating Competitors’ Performance in the Market Using Text Mining 96
4.4 End of Chapter 98
4.4.1 Revision Questions 99
4.4.2 Case Study: Strategic Evaluation of Entering in a New Market as a Low‐cost Airline Using System Dynamics Modeling 100
4.4.2.1 Describing the Key Strategic Aspects of a Business Using a System Dynamics Model 100
4.4.2.2 The easyJet Case 100
References 105
Further Reading 107
5 Industry Evolution 109
5.1 Dynamic Behavioral Model of Industry Evolution 113
5.1.1 Industries as Feedback Systems 114
5.1.2 A Behavioral Model of Organizations 115
5.1.3 Dynamic Behavioral Model of Industry Evolution 118
5.1.4 Types of Dynamic Behavior and Strategic Implications on the Evolution of Industries 119
5.2 Integrating Management Science into Strategic Management 125
5.2.1 Exploring Industry Evolution Using System Dynamics 126
5.2.2 Understanding How the Levels of Integration/Interaction Between Companies Affect the Evolution of Companies Using NKC Models 133
5.2.2.1 Insights from the Model 135
5.2.3 Uncovering the Evolution of the Technology in an Industry Using Latent Topic Modeling 136
5.3 End of Chapter 137
5.3.1 Revision Questions 139
5.3.2 Case Study: The Rise of Smartphones and its Impact on the Camera Industry 139
References 141
Further Reading 143
6 Competitive Advantage: Static Analysis 145
6.1 The Direction of a Company: Vision and Mission 146
6.2 Defining Value and Market Segmentation 146
6.3 Mapping the Activities to Deliver Value 149
6.3.1 Value Chain 149
6.3.2 Activity System Map 151
6.3.3 Business Model Canvas 152
6.4 Type of Business Strategies 154
6.4.1 Cost Advantage 154
6.4.2 Differentiation Advantage 154
6.4.3 Blue Ocean Strategy 157
6.5 Integrating Management Science into Strategic Management 160
6.5.1 Uncovering Market Segments Using Analytics Tools: Market Basket Transactions Analysis 160
6.6 End of Chapter 166
6.6.1 Revision Questions 166
6.6.2 Case Study: Revisiting Porter’s Generic Strategies Using System Dynamics 167
6.6.2.1 The Model 169
References 175
Futher Reading 176
7 Dynamic Resource Management 177
7.1 Resources and Capabilities 178
7.2 Resource Management 180
7.2.1 Resource Conceptualization 181
7.2.2 Resource Development 186
7.2.3 Business Performance 187
7.3 Integrating Management Science into Strategic Management 189
7.3.1 Resource Conceptualization Using Resource Mapping (as a Problem Structuring Method) 189
7.3.2 Resource Development Using Resource Mapping, System Dynamics and Scenarios 194
7.3.3 Resource Development Under Uncertainty Using Decision Trees 196
7.3.4 Developing Decision Trees from Big Data 202
7.3.5 Inferring Business Performance from Management Science Methods 203
7.4 End of Chapter 204
7.4.1 Revision Questions 205
7.4.2 Case Study: Majestic Wines 205
References 208
Futher Reading 210
8 Organizational Design 211
8.1 Organizational Components 212
8.1.1 Structure 212
8.1.2 Processes 215
8.2 Integrating Management Science into Strategic Management 217
8.2.1 Network Analysis for Organizational Structure Design 217
8.2.2 Business Process Modeling 222
8.2.3 Improving Manufacturing Productivity Using Predictive Analytics 227
8.3 End of Chapter 227
8.3.1 Revision Questions 229
8.3.2 Case Study: Improving Processes in Health Services Using Simulation 229
References 233
Futher Reading 235
9 Performance Measurement System 237
9.1 Measuring Financial Performance 240
9.2 Strategic Controls 243
9.3 Integrating Management Science into Strategic Management 244
9.3.1 Causal Models to Design Performance Management Systems 245
9.3.2 Implementing the Performance Management System: Analyzing, Reviewing, and Reporting Performance Data - the Role of Analytics 256
9.4 End of Chapter 257
9.4.1 Revision Questions 261
9.4.2 Case Study: The Impact of Performance Measurement Systems Adoption in Business Performance: the Shipping Industry
Case 262
References 267
Futher Reading 269
10 Start‐ups 271
10.1 The Components of a Business Plan for a Start‐up 274
10.1.1 Management 274
10.1.2 Market 278
10.1.3 Product/Service and Business Processes 279
10.1.4 Organization Design and Resources 281
10.2 Financial Management 284
10.3 Integrating Management Science into Strategic Management 293
10.3.1 Monte Carlo Simulation 293
10.4 End of Chapter 298
10.4.1 Revision Questions 300
10.4.2 Case Study: Designing the Next Boutique Winery 300
References 303
Futher Reading 305
11 Maturity 307
11.1 Strategies for Mature Organizations 310
11.1.1 Concentrated Growth, and Market and Product Development 310
11.1.2 Integration 314
11.1.3 Diversification 317
11.1.4 Associations with Other Companies: Joint Venture, Strategic Alliances and Consortia 320
11.2 Integrating Management Science into Strategic Management 323
11.2.1 Linear Optimization 324
11.2.2 Extensions in Linear Programming 326
11.2.3 Making the Integration of Organizations Reality Through Internet of Things and Analytics 328
11.3 End of Chapter 329
11.3.1 Revision Questions 330
11.3.2 Case Study: Choosing the Right Set of Capabilities - Development Projects to Achieve Multiple Organization Goals 330
References 338
Futher Reading 340
12 Regeneration 343
12.1 Strategies for Regenerating Organizations 346
12.1.1 Innovation 346
12.1.2 Turnaround 348
12.1.3 Ambidextrous Strategies 352
12.2 Integrating Management Science into Strategic Management 356
12.2.1 New Product Development: the Use of Text Analytics 356
12.2.2 Implementing Turnaround Strategies Using Data Envelopment Analysis: Identifying Operational Units for Either Improving or Pruning 357
12.3 End of Chapter 361
12.3.1 Revision Questions 362
12.3.2 Case Study: Managing Strategic Change Successfully: the Role of Benefits Realization Management 363
References 366
Futher Reading 368
Index 371
