1. Summary of Foundations of Strategies
By: Laura Carr, Ike Huestis, Brad Klingberg, Treanne Turner

2. The Role of Strategy in Success
Goals that are simple, consistent, and long term
Profound understanding of the competitive environment
Objective appraisal of resources
Effective implementation

3. PEST Analysis An environmental scanning framework
Provides a simple yet systematic approach to identifying those factors that are likely to shape the competitive conditions within an industry

4. PEST Analysis Political Economic Licenses Standardization
Restrictions on usage
The level of economic activity
The rapid take-up of mobile technologies in developing economies

5. PEST analysis Social Technological Health scares Changes in fashion
Improvements

6. Porter’s Five Forces of Competition Framework

7. Porter’s Five Forces of Competition Framework
3 sources of “horizontal” competition
Competition from substitutes
Competition from entrants
Competition from established rivals
2 sources of “vertical” competition
The power of suppliers
The power of buyers

8. Point 3: Putting resources and capability analysis to work
Step 1- Identify the key resources and capabilities
Step 2- Appraising resources and capabilities
Resources and capabilities are most important in conferring sustainable advantage
Strength and weaknesses as compared to companies
Step 3- Developing strategy implications
Determine key strengths and weakness

9. Step 1 Key capabilities Key Resources
Tangible: 511 stores in 44 states
Intangible: Reputation, relationships with brands
Ex: UnderArmour and Nike
Key Resources
Golf pros
Trainers
Fisherman
Footwear specialist

10. Step 2

11. Step 3 Not enough distributors to keep up with all 511 stores
Plan to build a new 600,000 sq ft distribution center
Allow up to 250 more stores

12. Point 4 Sustaining Competitive Advantage Identify Incentive Diagnosis
What companies pose a threat
Incentive
What product can be imitated
Diagnosis
Putting the product out
Resource acquisition
Have resources and capabilities to imitate the strategy of the company

13. Dicks Sporting goods Golf Headquarters Academy Gander Mountain
Golf Galaxy (First and Only Interactive golf store)
On site PGA pros, technicians
Academy
More Clothes, Footwear and Workout gear
Have footwear specialists and trainers on site
Gander Mountain
Provided more fishing, hunting and outdoor equipment
Have expert fisherman and hunters on site
Archery experts on staff

14. Ch. 5 Business Strategies in Different Industry and Sectoral Contexts
Summary
Classifying industries according to their stage of development can in itself be an insight exercise because:
It acts as a shortcut in strategy analysis
It encourages comparison with other industries
It directs attention to the forces of change and direction of industry evolution

15. Ch 5. Learning Objectives
Recognize the different stages of industry development
Identify the key success factors associated with industries at different stages
Recognize challenges in strategic decision making
Be able to use stakeholder analysis
Be able to use scenarios to explore industry and organizational futures

16. How Dick’s Sporting Engages in Strategy Analysis
Five Forces Model
Sporting Goods Retail Industry
Rivalry Among Existing Firms
High
Threat of New Entrants
Moderate
Threat of Substitute Products
Bargaining Power of Buyers
Bargaining Power of Suppliers

17. Ch. 6 Technology-based Industries and the Management of Innovation
Summary
Despite turbulence and uncertainty, there are analytical principles that can guide us toward strategies that can improve odds such as:
Evaluating an innovation’s potential to generate profit
Assessing the relative merits of licensing, alliances, joint ventures and internal development as alternative strategies for exploiting an innovation
Identifying the factors that determine the comparative advantages of being a leader or a follower in innovation

18. Ch 6. Learning Objectives
Analyze how technology affects industry structure and competition
Identify the factors that determine the returns to innovation
Formulate strategies for exploiting innovation and managing technology
Design the organizational conditions needed to implement such strategies successfully

19. How Dick’s Sporting Goods Manages Innovation
"DICK'S Sporting Goods innovates by separating itself from the pack. DICK'S associates do not talk about accomplishing a task; they discuss it briefly and almost immediately begin to execute. DICK'S is always one (or several) steps ahead of the competition. While others are refining their process for step 8, DICK'S has jumped to step 10 and is in the process of creating step 11. Open communication and high intellectual horsepower across departments creates an atmosphere that fosters this rapid innovation cycle." Director of Merchandising, Marketing & Management Systems

20. The Cooperation Problem
The Agency Problem: When a contracted agent’s goals may not be inline with the principal’s goals.
Classic Example:
Manager’s worried only about their own careers.
Shareholder’s concerned with creating wealth

21. How it Relates to Dick’s
Dick’s Sporting Goods hires professional golfers to work in their store. One of their primary job responsibilities include selling merchandise to customers.
Professional golfers usually love their sport, and may not want to sell gear to customers that don’t need it.

22. How Dick’s Solve the Problem
Performance Incentives
Like most sales positions, part of their pay comes from commission.
Other forms of incentives can include bonuses for managers or stock options for executives, as the better their company does the more their stocks are worth.

23. Diversification
The expansion of an existing firm into another product line or field of operation.
Can be related (Concentric) or unrelated (Conglomerate).
Can be vertical or horizontal diversification.

24. How it Relates to Dick’s
Dick’s Sporting Goods main focus is selling sports equipment. However, the company also sells other concentric merchandise, such as outdoor equipment. This reduces risk.
Also, selling merchandise for many different sports reduces risk.
Lockouts
Seasonal sports