Constantine Bourlakis
BOOK REVIEW
In Strategic Management theory and application go well together.
However, as an academic
teacher I note, that there is often a need for attention
to applied Case Studies in order to improve
students' understanding
of the business world. Teaching theory alone is not always so fruitful, and the
understanding of Strategic Management should include a balanced mix of synergies between theory
and practice. The book Understanding Strategic Management by Claire Capon therefore provides
sound support in that direction.
Altogether
there are 12 chapters that cover the main areas of strategic management, followed by a
glossary and a subject index at the end of the book. All chapters introduce the reader to the topic to be
covered with a graphical illustration of the essential strategy model to be discussed, an exposition of
chapter’s objectives, and more importantly an “Entry Case Study” that facilitates enormously students
to “break in” the topic that follows. “Margin Definitions” and “Important Key Terms” are also included
and highlighted throughout the entire text. At the end of every chapter the authoress includes five
successive sections on “Check your Understanding”, on “Review Questions”, on “Conclusion”, on
“Learning Outcomes and Summary” and on one “Exit Case Study” that round up students’ learning
objectives for the topics presented. This is followed with a “Discussion Topic” and a “Widen your
Horizons” themes that enhance further students’ critical thinking and understanding, and the
educational task in every chapter reaches a climax with the incorporation of a “Weblinks” section that
cites accessible to the topics covered web links, and also by two reference sections, one for “Further
Reading” and one with topic specific “References”.
Chapter 1 introduces the reader to the question of “What is Strategy?” and how it matters to
business firms, by giving a thorough emphasis on the definition and the understanding of the essential
concepts and approaches of the three strategic Cs, the EVR model, the various levels of strategy, the 7-
S framework, the prescriptive and the emergent strategies, and Mintzberg’s 5Ps of strategy approach.
In Chapter 2 a well organised and presented environmental analysis is included, that contains the
standard tools of PEST analysis and Porter’s five forces of competition model. PEST analysis
incorporates an informed presentation of the UK “political and economic environments”, and, a very
useful to the student of strategic management, presentation of the regulation of competition in the
United Kingdom. The authoress could add, in a future edition of the present text, the inclusion of
strategic groups analysis next to Porter’s five forces of competition model, something that will enable
students to have a better grasp of both the competitive environment and the competitive rivalry
principles that promote market segmentation. Chapter 3 switches the focus on strategic management
from the firm’s external environment to “a within the company” perspective, via the discussion of the
issue of “Managing Resources Competitively”. Thompson’s and Richardson’s generic competence
categories and Prahalad’s and Hamel’s criteria for identifying the “resource based” core competencies
of the corporation are exposed well, followed by a technically competent value chain analysis and its
associated value system and value chain linkages. Moving on to Chapter 4, there exists a thorough
analysis of company’s financial resources that every strategic management team must know to handle.
A strong asset of the chapter in question is the “Evaluating Financial Performance” part, where a
number of accounting performance ratios are juxtaposed effectively within short space. Chapter 5, that
follows, is concerned with the power and the interest of the stakeholders of the firm, the organizational
culture of the company, and the driving and restraining forces for organisational change processes that
take place within companies. The next chapter, Chapter 6, tackles the issues of human resource
management and the role and the kind of leadership in organisations. The chapter discusses effectively
the different ways to manage staff and resources in companies, and additionally the various approaches
to managerial leadership under different circumstances. In Chapter 7 the task in hand is to analyse and
to develop competitive and marketing strategies in company’s favour. The discussion and the examples
on Porter’s three generic strategies on United Kingdom supermarkets, as well as the inclusion of the
“Strategy Clock” and the “Product Life Cycle” techniques, clearly assist the understanding of the
concepts of the cost and differentiation competitive advantages on the company’s pursued broad and
narrow market targets and competitive position. The theme that follows in Chapter 8 relates the reader
to strategic options open to firms for successful expansion. Growth for success may take place in the
form of acquisition, organic growth, exporting, licensing or franchising and the company’s competitive
stature can also be strengthened via strategic alliances. A missing link in Chapter 8 is that Williamson’s
transaction cost economics approach on the firm’s motives to expand in local and in international
markets is not properly addressed. Chapter 9 on developing international strategy is a smooth and well-
placed continuation of Chapter 8, as the firm now is engaged in an effort to develop an international
strategy or to place its superior products in foreign markets via the form of foreign direct investment.
Chapter 10, on structure, culture and groups in organisations, consists one of the best chapters of the
