Creating Value, Second Edition: Successful Business Strategies

Creating Value Successful business strategies Second edition Shiv S. Mathur and Alfred Kenyon OXFORD AUCKLAND BOSTON JOHANNESBURG MELBOURNE NEW DELHI Butterworth-Heinemann Linacre House, Jordan Hill, Oxford OX2 8DP 225 Wildwood Avenue, Woburn, MA 01801-2041 A division of Reed Educational and Professional Publishing Ltd A member of the Reed Elsevier plc group First published as Creating Value: Shaping tomorrow’s business 1997 Reprinted 1997 Paperback edition 1998 Second edition 2001 © Shiv S. Mathur and Alfred Kenyon 1997, 1998, 2001 All rights reserved. No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright holder except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, England W1P 0LP. Applications for the copyright holder’s written permission to reproduce any part of this publication should be addressed to the publishers British Library Cataloguing in Publication Data Mathur, Shiv Creating value: successful business strategies. – 2nd ed. 1. Strategic planning 2. Competition I. Title II. Kenyon, Alfred 658.4'012 ISBN 0 7506 5363 9 For information on all Butterworth-Heinemann publications visit our website at www.bh.com Composition by Genesis Typesetting, Laser Quay, Rochester, Kent Printed and bound in Great Britain Contents ......................................................... Preface to the first edition ............................ Preface to the second edition ...................... Outline: The framework in a nutshell .......... 1 Purpose, scope and basics ....................... Introduction: The purpose of this book ............. The objective: financial results from customer markets ................................................ Organization- v customer-centred, supply v demand perspective ............................................ Non-profit-making enterprises ............................ Development of business strategy as a discipline ............................................................... The role of this book ............................................ Care with words ................................................... Views of ˛business strategy ............................... Mintzbergs ˛emerging business strategies ..... Strategy and ˛plan .............................................. Business strategy: a working definition ............ The macroeconomic environment ...................... Addressing the manager ..................................... Top management and its skills taken as given, not as a variable ........................................ Should managers be thinkers? ........................... What decisions are strategic? ............................ Business strategy, culture, mission statements ............................................................ Outline of the book .............................................. 5 5 7 7 8 9 10 10 12 13 13 14 15 15 16 17 18 How to read the book ........................................... Notes ..................................................................... 19 19 Part 1: FUNDAMENTALS: THE FRAMEWORK AND ITS MAIN BUILDING BLOCKS ......................................................... 2 Objectives: what is business strategy for? .... Corporate success and the financial and commercial markets ............................................................................ The fundamental goal is financial: to earn more than the cost of capital ............................................................. The