Operatinal Planning And Policy Assignment #2 PESTEL & Five Forces. Read Chapter 3 and view the required videos on PESTEL Analysis and the Five Forces Frame


Assignment #2 PESTEL & Five Forces.

Read Chapter 3 and view the required videos on PESTEL Analysis and the Five Forces Framework. 

Select one of the cases from Part 2 of the Thompson (2022) textbook to analyze the six components of the Macro-Environment and the Five Forces Model.

For this assignment:

  • Prepare      a brief PESTEL Analysis for your selected case from Part 2 of our Thompson      (2022) text.  You must address all six elements.
  • Prepare      a brief Five Force Analysis as presented in our Thompson (2022) text for      your selected case. Address all five forces.




· Porter’s 5 Forces EXPLAINED | B2U | Business To You


Submission Details: 

  • Your analysis      must be driven by facts, research, and data.
  • Your analysis      should be between 1000 and 1500 words.
  • Incorporate at least our course text and one non-course      scholarly/peer reviewed source in your paper.
  • Create Leve1,      2 and Level 3 APA headings for each portion of the analysis.  
  • All written      assignments must include a coverage page, introductory and concluding      paragraphs, reference page, double-spaced and proper in-text citations      using APA guidelines.

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The Quest for

Concepts and Cases

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The Quest for Competitive

Concepts and Cases | 23RD EDITION

Arthur A.

A. Peteraf

The University of


John E.
Texas A&M

The University
of Alabama

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Published by McGraw Hill LLC, 1325 Avenue of the Americas, New York, NY 10121. Copyright
©2022 by McGraw Hill LLC. All rights reserved. Printed in the United States of America. No part of
this publication may be reproduced or distributed in any form or by any means, or stored in a
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Some ancillaries, including electronic and print components, may not be available to customers
outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 LWI 24 23 22 21

ISBN 978-1-265-02824-4
MHID 1-265-02824-9

Cover Image: Image Source/Getty Images

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copyright page.

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a
website does not indicate an endorsement by the authors or McGraw Hill LLC, and McGraw Hill
LLC does not guarantee the accuracy of the information presented at these sites.


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To our families and especially our spouses:
Hasseline, Paul, Heather, and Kitty.

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About the Authors

Courtesy of Arthur A. Thompson, Jr.

Arthur A. Thompson, Jr., earned his BS and PhD degrees in economics
from The University of Tennessee, spent three years on the economics
faculty at Virginia Tech, and served on the faculty of The University of
Alabama’s College of Commerce and Business Administration for 24 years.
In 1974 and again in 1982, Dr. Thompson spent semester-long sabbaticals
as a visiting scholar at the Harvard Business School.

His areas of specialization are business strategy, competition and market
analysis, and the economics of business enterprises. In addition to
publishing over 30 articles in some 25 different professional and trade
publications, he has authored or co-authored five textbooks and six
computer-based simulation exercises. His textbooks and strategy
simulations have been used at well over 1,000 college and university
campuses worldwide.

Dr. Thompson and his wife of 58 years have two daughters, two
grandchildren, and a Yorkshire Terrier.

Courtesy of Margaret A. Peteraf

Margaret A. Peteraf is the Leon E. Williams Professor of Management
Emerita at the Tuck School of Business at Dartmouth College. She is an
internationally recognized scholar of strategic management, with a long list
of publications in top management journals. She has earned myriad honors
and prizes for her contributions, including the 1999 Strategic Management
Society Best Paper Award recognizing the deep influence of her work on
the field of Strategic Management. Professor Peteraf is a fellow of the
Strategic Management Society and the Academy of Management. She
served previously as a member of the Board of Governors of both the
Society and the Academy of Management and as Chair of the Business
Policy and Strategy Division of the Academy. She has also served in
various editorial roles and on numerous editorial boards, including the
Strategic Management Journal, the Academy of Management Review, and
Organization Science. She has taught in Executive Education programs in
various programs around the world and has won teaching awards at the
MBA and Executive level.

Professor Peteraf earned her PhD, MA, and MPhil at Yale University and
held previous faculty appointments at Northwestern University’s Kellogg
Graduate School of Management and at the University of Minnesota’s
Carlson School of Management.

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Courtesy of Richard’s Photography, LLC.

John E. Gamble is a Professor of Management and Dean of the College of
Business at Texas A&M University–Corpus Christi. His teaching and
research for 25 years has focused on strategic management at the
undergraduate and graduate levels. He has conducted courses in strategic
management in Germany since 2001, which have been sponsored by the
University of Applied Sciences in Worms.

Dr. Gamble’s research has been published in various scholarly journals
and he is the author or co-author of more than 75 case studies published in
an assortment of strategic management and strategic marketing texts. He
has done consulting on industry and market analysis for clients in a diverse
mix of industries.

Professor Gamble received his PhD, MA, and BS degrees from The
University of Alabama and was a faculty member in the Mitchell College of
Business at the University of South Alabama before his appointment to the
faculty at Texas A&M University–Corpus Christi.

Courtesy of Dr. A. J. (Lonnie) Strickland

Dr. A. J. (Lonnie) Strickland is the Thomas R. Miller Professor of
Strategic Management at the Culverhouse School of Business at The
University of Alabama. He is a native of north Georgia, and attended the
University of Georgia, where he received a BS degree in math and physics;
Georgia Institute of Technology, where he received an MS in industrial
management; and Georgia State University, where he received his PhD in
business administration.

Lonnie’s experience in consulting and executive development is in the
strategic management arena, with a concentration in industry and
competitive analysis. He has developed strategic planning systems for
numerous firms all over the world. He served as Director of Marketing and
Strategy at BellSouth, has taken two companies to the New York Stock
Exchange, is one of the founders and directors of American Equity
Investment Life Holding (AEL), and serves on numerous boards of
directors. He is a very popular speaker in the area of strategic management.

Lonnie and his wife, Kitty, have been married for over 49 years. They
have two children and two grandchildren. Each summer, Lonnie and his
wife live on their private game reserve in South Africa where they enjoy
taking their friends on safaris.


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y offering the most engaging, clearly articulated, and conceptually
sound text on strategic management, Crafting and Executing Strategy

has been able to maintain its position as the leading textbook in strategic
management for over 35 years. With this latest edition, we build on this
strong foundation, maintaining the attributes of the book that have long
made it the most teachable text on the market, while updating the content,
sharpening its presentation, and providing enlightening new illustrations
and examples.

The distinguishing mark of the 23rd edition is its enriched and enlivened
presentation of the material in each of the 12 chapters, providing an as up-
to-date and engrossing discussion of the core concepts and analytical tools
as you will find anywhere. As with each of our new editions, there is an
accompanying lineup of exciting new cases that bring the content to life and
are sure to provoke interesting classroom discussions, deepening students’
understanding of the material in the process.

While this 23rd edition retains the 12-chapter structure of the prior
edition, every chapter—indeed every paragraph and every line—has been
reexamined, refined, and refreshed. New content has been added to keep the
material in line with the latest developments in the theory and practice of
strategic management. In other areas, coverage has been trimmed to keep
the book at a more manageable size. Scores of new examples have been
added, along with many new Illustration Capsules, to enrich understanding
of the content and to provide students with a ringside view of strategy in
action. The result is a text that cuts straight to the chase in terms of what
students really need to know and gives instructors a leg up on teaching that
material effectively. It remains, as always, solidly mainstream and balanced,
mirroring both the penetrating insight of academic thought and the
pragmatism of real-world strategic management.

A standout feature of this text has always been the tight linkage between
the content of the chapters and the cases. The lineup of cases that

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accompany the 23rd edition is outstanding in this respect—a truly appealing
mix of strategically relevant and thoughtfully crafted cases, certain to
engage students and sharpen their skills in applying the concepts and tools
of strategic analysis. Many involve high-profile companies that the students
will immediately recognize and relate to; all are framed around key
strategic issues and serve to add depth and context to the topical content of
the chapters. We are confident you will be impressed with how well these
cases work in the classroom and the amount of student interest they will

For some years now, growing numbers of strategy instructors at business
schools worldwide have been transitioning from a purely text-case course
structure to a more robust and energizing text-case-simulation course
structure. Incorporating a competition-based strategy simulation has the
strong appeal of providing class members with an immediate and engaging
opportunity to apply the concepts and analytical tools covered in the
chapters and to become personally involved in crafting and executing a
strategy for a virtual company that they have been assigned to manage and
that competes head-to-head with companies run by other class
members. Two widely used and pedagogically effective online
strategy simulations, The Business Strategy Game and GLO-BUS, are
optional companions for this text. Both simulations were created by Arthur
Thompson, one of the text authors, and, like the cases, are closely linked to
the content of each chapter in the text. The Exercises for Simulation
Participants, found at the end of each chapter and integrated into the
Connect package for the text, provide clear guidance to class members in
applying the concepts and analytical tools covered in the chapters to the
issues and decisions that they have to wrestle with in managing their
simulation company.

To assist instructors in assessing student achievement of program
learning objectives, in line with AACSB requirements, the 23rd edition
includes a set of Assurance of Learning Exercises at the end of each chapter
that link to the specific learning objectives appearing at the beginning of
each chapter and highlighted throughout the text. An important instructional
feature of the 23rd edition is its more closely integrated linkage of selected
chapter-end Assurance of Learning Exercises and cases to Connect™. Your
students will be able to use Connect™ to (1) complete chapter-specific

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activities, including selected Assurance of Learning Exercises appearing at
the end of each of the 12 chapters as well as video and comprehension
cases, (2) complete chapter-end quizzes, (3) complete suggested assignment
questions for 14 of the 27 cases in this edition and (4) complete assignment
questions for simulation users. All Connect exercises are automatically
graded (with the exception of select Exercises for Simulation Participants),
thereby enabling you to easily assess the learning that has occurred.

In addition, both of the companion strategy simulations have a built-in
Learning Assurance Report that quantifies how well each member of your
class performed on nine skills/learning measures versus tens of thousands of
other students worldwide who completed the simulation in the past 12
months. We believe the chapter-end Assurance of Learning Exercises, the
all-new online and automatically graded Connect™ exercises, and the
Learning Assurance Report generated at the conclusion of The Business
Strategy Game and GLO-BUS simulations provide you with easy-to-use,
empirical measures of student learning in your course. All can be used in
conjunction with other instructor-developed or school-developed scoring
rubrics and assessment tools to comprehensively evaluate course or
program learning outcomes and measure compliance with AACSB
accreditation standards.

Taken together, the various components of the 23rd edition package and
the supporting set of instructor resources provide you with enormous course
design flexibility and a powerful kit of teaching/learning tools. We’ve done
our very best to ensure that the elements constituting the 23rd edition will
work well for you in the classroom, help you economize on the time needed
to be well prepared for each class, and cause students to conclude that your
course is one of the very best they have ever taken—from the standpoint of
both enjoyment and learning.

Nine standout features strongly differentiate this text and the accompanying
instructional package from others in the field:

1. We provide the clearest discussion of business models to be found
anywhere. By introducing this often-misunderstood concept right in the
first chapter and defining it precisely, we give students a leg up on
grasping this important concept. Follow-on discussions in the next eight
chapters drive the concept home. Illustration capsules and cases show
how a new business model can enable a company to compete
successfully even against well-established rivals. In some cases, a new
business model can even be the agent for disrupting an existing industry.

2. Our integrated coverage of the two most popular perspectives on
strategic management— positioning theory and resource-based theory—
is unsurpassed by any other leading strategy text. Principles and concepts
from both the positioning perspective and the resource-based perspective
are prominently and comprehensively integrated into our coverage of
crafting both single-business and multibusiness strategies. By
highlighting the relationship between a firm’s resources and capabilities
to the activities it conducts along its value chain, we show explicitly how
these two perspectives relate to one another. Moreover, in Chapters 3
through 8 it is emphasized repeatedly that a company’s strategy must be
matched not only to its external market circumstances but also to its
internal resources and competitive capabilities.

3. With this new edition, we provide the clearest, easiest to understand
presentation of the value-price-cost framework. In recent years, this
framework has become an essential aid to teaching students how
companies create economic value in the course of conducting business.
We show how this simple framework informs the concept of the business
model as well as the all-important concept of competitive advantage. In
Chapter 5, we add further clarity by showing in pictorial fashion how the
value-price-cost framework relates to the different sources of competitive
advantage that underlie the five generic strategies.

4. Our coverage of cooperative strategies and the role that
interorganizational activity can play in the pursuit of competitive
advantage is similarly distinguished. The topics of the value net,
ecosystems, strategic alliances, licensing, joint ventures, and other types
of collaborative relationships are featured prominently in a number of
chapters and are integrated into other material throughout the text. We

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show how strategies of this nature can contribute to the success of single-
business companies as well as multibusiness enterprises, whether with
respect to firms operating in domestic markets or those operating in the
international realm.

5. The attention we give to international strategies, in all their dimensions,
make this textbook an indispensable aid to understanding strategy
formulation and execution in an increasingly connected, global world.
Our treatment of this topic as one of the most critical elements of the
scope of a company’s activities brings home to students the connection
between the topic of international strategy with other topics concerning
firm scope, such as multibusiness (or corporate) strategy, outsourcing,
insourcing, and vertical integration.

6. With a standalone chapter devoted to these topics, our coverage of
business ethics, corporate social responsibility, and environmental
sustainability goes well beyond that offered by any other leading strategy
text. Chapter 9, “Ethics, Corporate Social Responsibility, Environmental
Sustainability, and Strategy,” fulfills the important functions of (1)
alerting students to the role and importance of ethical and socially
responsible decision making and (2) addressing the accreditation
requirement of the AACSB International that business ethics be
visibly and thoroughly embedded in the core curriculum. Moreover,
discussions of the roles of values and ethics are integrated into portions
of other chapters, beginning with the first chapter, to further reinforce
why and how considerations relating to ethics, values, social
responsibility, and sustainability should figure prominently into the
managerial task of crafting and executing company strategies.

7. Long known as an important differentiator of this text, the case collection
in the 23rd edition is truly unrivaled from the standpoints of student
appeal, teachability, and suitability for drilling students in the use of the
concepts and analytical treatments in Chapters 1 through 12. The 27
cases included in this edition are the very latest, the best, and the most on
target that we could find. The ample information about the cases in the
Instructor’s Manual makes it effortless to select a set of cases each term
that will capture the interest of students from start to finish.

8. The text is now optimized for hybrid and online delivery through robust
assignment and assessment content integrated into Connect™. This will
enable professors to gauge class members’ prowess in accurately
completing (a) additional exercises and selected chapter-end exercises,
(b) chapter-end quizzes, (c) exercises for simulation participants, and (d)
exercises for 14 of the cases in this edition.

9. Two cutting-edge and widely used strategy simulations—The Business
Strategy Game and GLO-BUS—are optional companions to the 23rd
edition. These give you an unmatched capability to employ a text-case-
simulation model of course delivery.


Chapter 1 serves as a brief, general introduction to the topic of strategy,
focusing on the central questions of “What is strategy?” and “Why is it
important?” As such, it serves as the perfect accompaniment for your
opening-day lecture on what the course is all about and why it matters.
Using the example of Apple, Inc., to drive home the concepts in this
chapter, we introduce students to what we mean by “competitive
advantage” and the key features of business-level strategy. Describing
strategy making as a process, we explain why a company’s strategy is
partly planned and partly reactive and why a strategy tends to co-evolve
with its environment over time. As part of this strategy making process,
we discuss the importance of ethics in choosing among strategic
alternatives. We introduce the concept of a business model and offer a
clear definition along with an illustration capsule that provides examples
from the real world of business. We explain why a viable business model
must provide both an attractive value proposition for the company’s
customers and a formula for making profits for the company. A key
feature of this chapter is a depiction of how the value-price-cost
framework can be used to frame this discussion. We show how the mark
of a winning strategy is its ability to pass three tests: (1) the fit test (for

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internal and external fit), (2) the competitive advantage test, and (3) the
performance test. And we explain why good company performance
depends not only upon a sound strategy but upon solid strategy execution
as well.
Chapter 2 presents a more complete overview of the strategic
management process, covering topics ranging from the role of vision,
mission, and values to what constitutes good corporate governance. It
makes a great assignment for the second day of class and provides a
smooth transition into the heart of the course. It introduces
students to such core concepts as strategic versus financial
objectives, the balanced scorecard, strategic intent, and business-level
versus corporate-level strategies. It explains why all managers are on a
company’s strategy-making, strategy- executing team and why a
company’s strategic plan is a collection of strategies devised by different
managers at different levels in the organizational hierarchy. The chapter
concludes with a section on the role of the board of directors in the
strategy-making, strategy-executing process and examines the conditions
that have led to recent high-profile corporate governance failures. The
illustration capsule on Volkswagen’s emissions scandal brings this section
to life.
The next two chapters introduce students to the two most fundamental
perspectives on strategy making: the positioning view, exemplified by
Michael Porter’s classic “five forces model of competition,” and the
resource-based view. Chapter 3 provides what has long been the clearest,
most straightforward discussion of the five forces framework to be found
in any text on strategic management. It also offers a set of complementary
analytical tools for conducting competitor analysis, identifying strategic
groups along with the mobility barriers that limit movement among them,
and demonstrates the importance of tailoring strategy to fit the
circumstances of a company’s industry and competitive environment. The
chapter includes a discussion of the value net framework, which is useful
for conducting analysis of how cooperative as well as competitive moves
by various parties contribute to the creation and capture of value in an

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Chapter 4 presents the resource-based view of the firm, showing why
resource and capability analysis is such a powerful tool for sizing up a
company’s competitive assets. It offers a simple framework for
identifying a company’s resources and capabilities and explains how the
VRIN framework can be used to determine whether they can provide the
company with a sustainable competitive advantage over its competitors.
Other topics covered in this chapter include dynamic capabilities, SWOT
analysis, value chain analysis, benchmarking, and competitive strength
assessments, thus enabling a solid appraisal of a company’s cost position
and customer value proposition vis-á-vis its rivals. An important feature
of this chapter is a table showing how key financial and operating ratios
are calculated and how to interpret them. Students will find this table
handy in doing the number crunching needed to evaluate whether a
company’s strategy is delivering good financial performance.
Chapter 5 sets forth the basic approaches available for competing and
winning in the marketplace in terms of the five generic competitive
strategies— broad low-cost, broad differentiation, best-cost, focused
differentiation, and focused low cost. It demonstrates pictorially the link
between generic strategies, the value-price-cost framework, and
competitive advantage. The chapter also describes when each of the five
approaches works best and what pitfalls to avoid. Additionally, it explains
the role of cost drivers and uniqueness drivers in reducing a company’s
costs and enhancing its differentiation, respectively.
Chapter 6 focuses on other strategic actions a company can take to
complement its competitive approach and maximize the power of its
overall strategy. These include a variety of offensive or defensive
competitive moves, and their timing, such as blue-ocean strategies and
first-mover advantages and disadvantages. It also includes choices
concerning the breadth of a company’s activities (or its scope of
operations along an industry’s entire value chain), ranging from
horizontal mergers and acquisitions, to vertical integration, outsourcing,
and strategic alliances. This material serves to segue into the scope issues
covered in the next two chapters on international and diversification

Chapter 7 takes up the topic of how to compete in international markets.
It begins with a discussion of why differing market conditions across
countries must necessarily influence a company’s strategic choices about
how to enter and compete in foreign markets. It presents five major
strategic options for expanding a company’s geographic scope and
competing in foreign markets: export strategies, licensing, franchising,
establishing a wholly owned subsidiary via acquisition or “greenfield”
venture, and alliance strategies. It includes coverage of topics such as
Porter’s Diamond of National Competitive Advantage, multi-market
competition, and the choice between multidomestic, global, and
transnational strategies. This chapter explains the impetus for sharing,
transferring, or accessing valuable resources and capabilities across
national borders in the quest for competitive advantage, connecting the
material to that on the resource-based view from Chapter 4. The chapter
concludes with a discussion of the unique characteristics of competing in
developing-country markets.
Chapter 8 concerns strategy making in the multibusiness company,
introducing the topic of corporate-level strategy with its special focus on
diversification. The first portion of this chapter describes when and why
diversification makes good strategic sense, the different means of
diversifying a company’s business lineup, and the pros and cons of
related versus unrelated diversification strategies. The second part of the
chapter looks at how to evaluate the attractiveness of a diversified
company’s business lineup, how to decide whether it has a good
diversification strategy, and what strategic options are available for
improving a diversified company’s future performance. The evaluative
technique integrates material concerning both industry analysis and the
resource-based view, in that it considers the relative attractiveness of the
various industries the company has diversified into, the company’s
competitive strength in each of its lines of business, and the extent to
which its different businesses exhibit both strategic fit and resource fit.
Although the topic of ethics and values comes up at various points in this
textbook, Chapter 9 brings more direct attention to such issues and may
be used as a stand-alone assignment in either the early, middle, or late
part of a course. It concerns the themes of ethical standards in business,

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approaches to ensuring consistent ethical standards for companies with
international operations, corporate social responsibility, and
environmental sustainability. The contents of this chapter are sure to give
students some things to ponder, rouse lively discussion, and help to make
students more ethically aware and conscious of why all companies should
conduct their business in a socially responsible and sustainable manner.
The next three chapters (Chapters 10, 11, and 12) comprise a module on
strategy execution that is presented in terms of a 10-step action
framework. Chapter 10 provides an overview of this framework and then
explores the first three of these tasks: (1) staffing the organization with
people capable of executing the strategy well, (2) building the
organizational capabilities needed for successful strategy execution, and
(3) creating an organizational structure supportive of the strategy
execution process.
Chapter 11 discusses five additional managerial actions that advance the
cause of good strategy execution: (1) allocating resources to enable the
strategy execution process, (2) ensuring that policies and procedures
facilitate rather than impede strategy execution, (3) using process
management tools and best practices to drive continuous improvement in
the performance of value chain activities, (4) installing information and
operating systems that help company personnel carry out their
strategic roles, and (5) using rewards and incentives to
encourage good strategy execution and the achievement of performance
Chapter 12 completes the 10-step framework with a consideration of the
importance of creating a healthy corporate culture and exercising
effective leadership in pr

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