MGT 4302 UHD US Retail Family Clothing Industry Case Analysis MGT 4302 ‐ Assignment 4
Case: Gap Inc. Available from the textbook (6th edition): Essentials of Strategic Management: The Quest for Competitive Advantage 6th edition by Gamble, Peteraf, and Thompson (case 6‐ page 298) Case Questions: 1. What is competition like in the U.S. Retail Family Clothing Industry?
Use Porter’s 5 forces framework.
Maximum length for your answer to this question: 250 words (bullet points are OK). 2. What do you see as the key success factors in the market for family clothing?
Use bullet points.
Maximum length for your answer to this question: 100 words. 3. What recommendations would you make to GAP Inc. to improve its competitiveness in the market while mitigating any current and future risks?
Briefly explain 2‐3 recommendations. Maximum length for your answer to this question: 150 words (bullet points are OK).
Deadline: Sunday April 14
Please do not work with classmates on any part of this assignment – it represents individual thinking and effort. Cooperation on individual assignments will be treated as academic misconduct.
Please note that you should place yourself at the time of the case and pretend that you are there! Don’t use any info that you now know and don’t use outside research. The case info may be incomplete or ambiguous ‐ use your skill as an analyst to do the best you can with the limited info at hand!
Some case issues are subject to judgment. If there is no detailed information in the case, I may accept a variety of answers, as long as assumptions are clearly stated, and the conclusion is backed up by solid arguments. ESSENTIALS OF
The Quest for Competitive Advantage
John E. Gamble
Texas A&M University–Corpus Christi
Margaret A. Peteraf
Arthur A. Thompson, Jr.
The University of Alabama
ESSENTIALS OF STRATEGIC MANAGEMENT: THE QUEST FOR COMPETITIVE ADVANTAGE,
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2019 by McGrawHill Education. All rights reserved. Printed in the United States of America. Previous editions © 2017, 2015,
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Library of Congress Cataloging-in-Publication Data
Names: Gamble, John (John E.) author. | Thompson, Arthur A., 1940- author. |
Peteraf, Margaret Ann, author.
Title: Essentials of strategic management: the quest for competitive advantage/
John E. Gamble, Texas A&M University-Corpus Christi, Margaret A. Peteraf,
Dartmouth College, Arthur A. Thompson, Jr., The University of Alabama.
Description: Sixth Edition. | Dubuque : McGraw-Hill Education, 2019. |
Revised edition of the authors’ Essentials of strategic management, 
Identifiers: LCCN 2017059878 | ISBN 9781259927638 (paperback)
Subjects: LCSH: Strategic planning. | Business planning. | Competition. |
Strategic planning–Case studies. | BISAC: BUSINESS & ECONOMICS /
Classification: LCC HD30.28 .G353 2018 | DDC 658.4/012–dc23
LC record available at https://lccn.loc.gov/2017059878
ABOUT THE AUTHORS
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 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, Master of Arts, and Bachelor of Science 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.
John E. Gamble
©Richard’s Photography LLC
Margaret A. Peteraf is the Leon E. Williams Professor of Management 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 on the Board of Directors of the Strategic Management Society and has been elected as a Fellow of the Society. She served previously as a member of the Academy of Management’s Board of
Governors and as Chair of the Business Policy and Strategy Division of the Academy.
She has also served in various editorial roles and is presently on nine editorial boards,
including the Strategic Management Journal, the Academy of Management Review, and
Organization Science. She has taught in Executive Education 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.
Margaret A. Peteraf
iv About the Authors
Arthur A. Thompson, Jr. earned his BS and PhD degrees in economics from The
Arthur A. Thompson, Jr.
Photo provided by the author.
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 25 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 that are used in colleges and
Dr. Thompson spends much of his off-campus time giving presentations, putting on
management development programs, working with companies, and helping operate a
business simulation enterprise in which he is a major partner.
Dr. Thompson and his wife of 57 years have two daughters, two grandchildren, and
a Yorkshire terrier.
PART ONE CONCEPTS AND TECHNIQUES
FOR CRAFTING AND EXECUTING
PART TWO CASES IN CRAFTING AND
Airbnb, Inc., in 2017 233
1. Strategy, Business Models, and Competitive
2. Strategy Formulation, Execution, and
Competition in the Craft Brewing Industry in
Fitbit, Inc., in 2017: Can It Revive Its Strategy
and Reverse Mounting Losses? 271
lululemon athletica, inc., in 2017: Is the
Company on the Path to Becoming a High
Performer Once Again? 279
Gap Inc.: Can It Develop a Strategy to Connect
with Consumers in 2017? 298
GoPro in 2017: Will Its Turnaround Strategy
Restore Profitability? 307
Ricoh Canada 322
Section A: Introduction and Overview
Section B: Core Concepts and Analytical Tools
3. Evaluating a Company’s External Environment 36
4. Evaluating a Company’s Resources, Capabilities,
and Competitiveness 64
Section C: Crafting a Strategy
5. The Five Generic Competitive Strategies 88
6. Strengthening a Company’s Competitive Position:
Strategic Moves, Timing, and Scope of
7. Strategies for Competing in International
8. Corporate Strategy: Diversification and the
Multibusiness Company 154
9. Ethics, Corporate Social Responsibility,
Environmental Sustainability, and Strategy 182
Section D: Executing the Strategy
Costco Wholesale in 2017: Mission, Business
Model, and Strategy 238
Mondelēz International’s Diversification
Strategy in 2017: Has Corporate Restructuring
Benefited Shareholders? 335
Case 10 Robin Hood 346
Case 11 Rosen Hotels & Resorts 348
Case 12 TOMS Shoes in 2016: An Ongoing Dedication
to Social Responsibility 360
10. Superior Strategy Execution—Another Path to
Competitive Advantage 199
Appendix Key Financial Ratios: How to Calculate
Them and What They Mean 231
he standout features of this sixth edition of Essentials of Strategic Management
are its concisely written and robust coverage of strategic management concepts
and its compelling collection of cases. The text presents a conceptually strong treatment
of strategic management principles and analytic approaches that features straight-tothe-point discussions, timely examples, and a writing style that captures the interest of
students. While this edition retains the 10-chapter structure of the prior edition, every
chapter 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. Also, scores of new examples have been added, along with fresh
Concepts & Connections illustrations, to make the content come alive and to provide
students with a ringside view of strategy in action. The fundamental character of the
sixth edition of Essentials of Strategic Management is very much in step with the best
academic thinking and contemporary management practice. The chapter content continues to be solidly mainstream and balanced, mirroring both the penetrating insight of
academic thought and the pragmatism of real-world strategic management.
Complementing the text presentation is a truly appealing lineup of 12 diverse,
timely, and thoughtfully crafted cases. All of the cases are tightly linked to the content
of the 10 chapters, thus pushing students to apply the concepts and analytical tools
they have read about. Seven of the cases were written by the coauthors to illustrate specific tools of analysis or distinct strategic management theories. Cases not written by
the coauthors were included because of their exceptional pedagogical value and linkage to strategic management concepts presented in the text. We are confident you will
be impressed with how well each of the 12 cases in the collection will work in the classroom and the amount of student interest they will spark.
For some years now, growing numbers of strategy instructors at business schools worldwide have been transitioning from a purely text-cases course structure to a more robust
and energizing text-cases-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
in a head-to-head competition 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, 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, 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.
Through our experiences as business school faculty members, we also fully understand the assessment demands on faculty teaching strategic management and business
policy courses. In many institutions, capstone courses have emerged as the logical
home for assessing student achievement of program learning objectives. The sixth edition
includes 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 this edition is the linkage of
selected chapter-end Assurance of Learning Exercises and cases to the publisher’s Connect®
web-based assignment and assessment platform. Your students will be able to use the
online Connect supplement to (1) complete two of the Assurance of Learning Exercises
appearing at the end of each of the 10 chapters, (2) complete chapter-end quizzes,
and (3) complete case tutorials based upon the suggested assignment questions for
all 12 cases in this edition. With the exception of some of the chapter-end Assurance
of Learning exercises, all of the Connect exercises are automatically graded, 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 instructordeveloped or school-developed scoring rubrics and assessment tools to comprehensively evaluate course or program learning outcomes.
Taken together, the various components of the sixth 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 comprising this 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.
Differentiation from Other Texts
Five noteworthy traits strongly differentiate this text and the accompanying instructional
package from others in the field:
1. 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
2. Our coverage of business ethics, core values, social responsibility, and environmental
sustainability is unsurpassed by any other leading strategy text. Chapter 9, “Ethics,
Corporate Social Responsibility, Environmental Sustainability, and Strategy,” is
embellished with fresh content so that it can better fulfill the important functions of
(1) alerting students to the role and importance of ethical and socially responsible
decision making and (2) addressing the accreditation requirements 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 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.
3. The caliber of the case collection in the sixth 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 10. The 12 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.
4. The publisher’s Connect assignment and assessment platform is tightly linked to the
text chapters and case lineup. The Connect package for the sixth edition allows professors to assign autograded quizzes and select chapter-end Assurance of Learning
Exercises to assess class members’ understanding of chapter concepts. In addition,
our texts have pioneered the extension of the Connect platform to case analysis.
The autograded case exercises for each of the 12 cases in this edition are robust
and extensive and will better enable students to make meaningful contributions
to class discussions. The autograded Connect case exercises may also be used as
graded assignments in the course.
5. The two cutting-edge and widely used strategy simulations—The Business Strategy
Game and GLO-BUS—that are optional companions to the sixth edition give you
unmatched capability to employ a text-case-simulation model of course delivery.
Organization, Content, and Features of the Sixth
Edition Text Chapters
The following rundown summarizes the noteworthy features and topical emphasis in
this new edition:
• Chapter 1 serves as an introduction to the topic of strategy, focusing on the managerial actions that will determine why a company matters in the marketplace. We introduce students to the primary approaches to building competitive advantage and
the key elements of business-level strategy. Following Henry Mintzberg’s pioneering research, we also stress why a company’s strategy is partly planned and partly
reactive and why this strategy tends to evolve. The chapter also discusses why it
is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit formula. This brief chapter is the
perfect accompaniment to your opening-day lecture on what the course is all about
and why it matters.
• Chapter 2 delves more deeply into the managerial process of actually crafting and
executing a strategy. It makes a great assignment for the second day of class and provides a smooth transition into the heart of the course. The focal point of the chapter
is the five-stage managerial process of crafting and executing strategy: (1) forming a
strategic vision of where the company is headed and why, (2) developing strategic
as well as financial objectives with which to measure the company’s progress,
(3) crafting a strategy to achieve these targets and move the company toward its
market destination, (4) implementing and executing the strategy, and (5) evaluating
a company’s situation and performance to identify corrective adjustments that are
needed. Students are introduced to such core concepts as strategic visions, mission
statements and core values, the balanced scorecard, and business-level versus
corporate-level strategies. There’s a robust discussion of 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 winds up with a section on how to
exercise good corporate governance and examines the conditions that led to recent
high-profile corporate governance failures.
• Chapter 3 sets forth the now-familiar analytical tools and concepts of industry and
competitive analysis and demonstrates the importance of tailoring strategy to fit the
circumstances of a company’s industry and competitive environment. The standout
feature of this chapter is a presentation of Michael Porter’s “five forces model of competition” that has long been the clearest, most stra…
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