Strategic Management: Competitiveness and Globalisation 7th ASIA Pacific Edition by Dallas Hanson So
Instructor’s Manual – Strategic Management, 7 th Edition
Chapter 1
Strategic management and strategic
competitiveness
Learning Objectives
1. Analyse the components of the strategic management process.
2. Describe the competitive landscape and explain how globalisation and technological
changes shape it.
3. Use the industrial organisation (I/O) model to explain how organisations can earn
above-average returns.
4. Use the resource-based model to explain how organisations can earn above-
average returns.
5. Describe vision and mission and discuss their value.
6. Define and classify the four major stakeholder groups and describe their ability to
influence organisations.
7. Describe the work of strategic leaders.
Lecture Notes
Chapter Introduction: You may want to begin this lecture with a general comment
that Chapter 1 provides an overview of the strategic management process. This
chapter introduces a number of key terms and models that students will study in
more detail in Chapters 2 to 13. Stress the importance of students paying careful
attention to the concepts introduced in this chapter so that they are well grounded in
strategic management concepts before proceeding further.
OPENING CASE
McDonald’s and brand recognition
McDonald’s, a well-known global brand, has achieved international success over the
years. For example, in 2018 it had 37,855 restaurants around the globe. This has
resulted in very strong brand recognition. For example, a recent survey found that
88% of people were able to identify the iconic McDonald’s Golden Arches logo. A key
factor influencing McDonald’s international growth is its strategic competitiveness.
The case demonstrates that McDonald’s has different competitive positions in
different countries, some stronger and some weaker than competitors. For example,
it is facing stiff competition with KFC in China. In India, it is still relatively a small
brand but expanding strategically by alliances with local organisations, sourcing
almost all products locally. Hence, it has complex country-specific challenges which
necessitate a country-specific response. For example, McDonald’s is responding to
local consumer needs very well. In Australia, McDonald’s offers a flexible menu, such
as ‘gourmet coffee’ and fresh-food bars. Similarly, it is responding to consumer
demand in the UK by offering details on what goes into their food.
1-2 Hanson 7e Instructor’s Manual
Hanson, Backhouse, Leaney, Hitt, Ireland, Hoskisson, Strategic Management, 7th Edition. © 2022 Cengage
Australia Pty Ltd. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
Teaching Note: To kick off discussion, ask how the case lays the groundwork for
the importance of strategy as defined in the chapter – the coordinated set of
commitments and actions designed to achieve competitive advantage. Ask
students why McDonald’s has different strategic competitiveness in different
countries and how it is linked to an external environment. How does McDonald’s
respond to country-specific challenges by accommodating the local business
environment and consumer demand. The case also provides a good link with
strategic leadership. How can effective leadership maintain McDonald’s success in
future, particularly post-COVID?
1 Analyse the components of the strategic management process.
A framework that can assist organisations in their quest for strategic competitiveness is
the strategic management process, the full set of commitments, decisions and actions
required for an organisation to systematically achieve strategic competitiveness and
earn above-average returns. This process is illustrated in Figure 1.1.
Strategic competitiveness is achieved when an organisation successfully formulates and
implements a value-creating strategy. By implementing a value-creating strategy that
current and potential competitors are not simultaneously implementing and that
competitors are unable to duplicate, or find too costly to imitate, an organisation
achieves a competitive advantage.
Strategy can be defined as an integrated and coordinated set of commitments and
actions designed to exploit core competencies and gain a competitive advantage.
So long as an organisation can sustain (or maintain) a competitive advantage, investors
will earn above-average returns. Above-average returns are returns that exceed returns
that investors expect to earn from other investments with similar levels of risk (investor
uncertainty about the economic gains or losses that will result from a particular