Preface to Second Edition xiii
Acknowledgments xv
About the Companion Website xvii
1 Introduction to Strategic Analytics 1
1.1 What Is Analytics? 3
1.2 What Is Management Science? 10
1.3 What Is Information Technology: New Challenges? 20
1.4 What Is AI and How Can It Enhance Business Analytics? 23
1.4.1 Integration of GenAI with BA 26
1.4.2 Implications of AI Adoption in Business Decision- making Processes 29
1.5 What Is Strategic Management? 31
1.5.1 What Are the Characteristics of Strategic Problems? 33
1.5.2 Different Approaches to Strategic Management 36
1.6 Strategy Analytics: Integrating Management Science and AI with Strategic Management 40
References 44
2 Dynamic Managerial Capabilities for a Complex World with AI 49
2.1 Dynamic Managerial Capabilities 50
2.1.1 Task Dimension 53
2.1.2 Cognitive Dimension 54
2.1.3 Behavior Dimension 55
2.1.4 AI Dimension 57
2.2 Integrating Management Science, Analytics, and AI for Strategic Management Practice 61
2.2.1 Managers as Modelers 62
2.2.2 Behavior with and Beyond Models 65
2.2.3 Modeling Systems 66
2.2.4 Big Data Analytics Capabilities 69
2.2.5 AI Capabilities 70
2.3 End of Chapter 73
2.3.1 Revision Questions 74
2.3.2 Case Study: The Future of Strategizing with AI 74
References 77
Further Reading 82
3 External Environment: Political, Economic, Societal, Technological, and Environmental Factors 85
3.1 The PESTE Analysis 87
3.1.1 Limitations of PESTE Analysis 88
3.2 Integrating Management Science, Analytics, and AI for Strategic Management Practice 92
3.2.1 Achieving Consistency in PESTE Analysis Using the Analytic Hierarchy Process 92
3.2.2 Understanding the Evolution of PESTE Factors Using Visualization Analytics 105
3.2.3 Scanning PESTE Factors Using AI 106
3.2.4 Developing Scenarios Supported With AI 107
3.2.5 Developing Scenarios Supported With System Dynamics 108
3.3 End of Chapter 109
3.3.1 Revision Questions 110
3.3.2 Case Study: Westmill Co- op and the Rise of Renewable Energy 111
References 113
Further Reading 115
4 Industry Dynamics 117
4.1 Defining the Industry 118
4.2 Porterâs Five Forces and Industry Dynamics 119
4.2.1 Bargaining Power of Suppliers 120
4.2.2 Bargaining Power of Buyers 121
4.2.3 Substitutes 122
4.2.4 Threat of New Entrants 122
4.2.5 Intensity of Rivalry 123
4.2.6 Strategic Issues Derived from Five Forces Analysis 125
4.3 Integrating Management Science, Analytics, and AI for Strategic Management Practice 130
4.3.1 Revenue Management 130
4.3.2 Evaluating Competitorsâ Performance in the Market Using Text Mining 133
4.3.3 Managing Five Forces Through AI- enhanced Methods 139
4.4 End of Chapter 141
4.4.1 Revision Questions 141
4.4.2 Case Study: Strategic Evaluation of Entering in a New Market as a Low- cost Airline Using System Dynamics Modeling 142
4.4.2.1 Describing the Key Strategic Aspects of a Business Using a System Dynamics Model 142
4.4.2.2 The easyJet Case 143
References 148
Further Reading 150
5 Industry Evolution 153
5.1 Dynamic Behavioral Model of Industry Evolution 157
5.1.1 Industries as Feedback Systems 158
5.1.2 A Behavioral Model of Organizations 159
5.1.3 Dynamic Behavioral Model of Industry Evolution 161
5.1.4 Types of Dynamic Behavior and Strategic Implications on the Evolution of Industries 163
5.1.5 Industry Evolution: A Regional Socioeconomic Perspective 166
5.1.6 Industries Evolution: A Power Game 168
5.2 Integrating Management Science, Analytics, and AI for Strategic Management Practice 173
5.2.1 Exploring Industry Evolution Using System Dynamics 174
5.2.1.1 Market Development 174
5.2.2 Understanding How the Levels of Integration/Interaction Between Companies Affect the Evolution of Companies Using NKC Models 181
5.2.2.1 Insights from the Model 183
5.2.3 Uncovering the Evolution of Technology in an Industry Using Text Mining Methods 185
5.2.4 Mapping Industry Evolution Using AI 186
5.3 End of Chapter 187
5.3.1 Revision Questions 188
5.3.2 Case Study: How Smartphones and AI Have Shaped the Camera Industry 189
References 192
Further Reading 194
6 Competitive Advantage: Static Analysis 195
6.1 The Direction of a Company: Vision and Mission 196
6.2 Defining Value and Market Segmentation 196
6.3 Mapping the Activities to Deliver Value 200
6.3.1 Value Chain 200
6.3.2 Activity System Map 202
6.3.3 Business Model Canvas 203
6.4 Type of Business Strategies 205
6.4.1 Cost Advantage 205
6.4.2 Differentiation Advantage 206
6.4.2.1 The Management Response 209
6.4.2.2 The Market Response 210
6.4.3 Blue Ocean Strategy 211
6.4.4 Sustainability as a Strategy 212
6.4.5 AI as Strategy 213
6.5 Integrating Management Science, Analytics, and AI for Strategic Management Practice 213
6.5.1 Uncovering Market Segments Using Analytics Tools: Market Basket Transactions Analysis 214
6.5.2 Uncovering Market Segments Using Analytics Tools: Clustering 219
6.5.3 Defining Market Positioning Using AI 220
6.6 End of Chapter 220
6.6.1 Revision Questions 223
6.6.2 Case Study: Revisiting Porterâs Generic Strategies Using System Dynamics 224
6.6.2.1 The Model 226
6.6.2.2 Expanding the Model to Consider Sustainability 231
References 233
Further Reading 235
7 Dynamic Resource Management 237
7.1 Resources and Capabilities 238
7.2 Resource Management 240
7.2.1 Resource Conceptualization 241
7.2.2 Resource Development 246
7.2.3 Business Performance 248
7.3 Sustainable Resource Management 249
7.3.1 Sustainability and Stakeholder Management 250
7.4 Integrating Management Science, Analytics, and AI for Strategic Management Practice 252
7.4.1 Boundary Definition: Using Systems Thinking to Facilitate Sustainable Systems 253
7.4.2 Resource Conceptualization Using Resource Mapping (as a Problem Structuring Method) 256
7.4.3 Resource Development Using Resource Mapping, System Dynamics, and Scenarios 259
7.4.4 Resource Development Under Uncertainty Using Decision Trees 263
7.4.5 Developing Decision Trees Using Big Data and AI 269
7.4.6 Inferring Business Performance from Management Science Methods 272
7.4.7 Using AI to Predict and Improve Business Performance 272
7.5 End of Chapter 273
7.5.1 Revision Questions 275
7.5.2 Case Study: Majestic Wines 275
References 278
Further Reading 281
8 Organizational Design 283
8.1 Organizational Components 284
8.1.1 Structure 284
8.1.2 Processes 287
8.1.3 The Soft Side of Organizations: Culture and Values 288
8.1.4 Digital Transformation 294
8.2 Integrating Management Science, Analytics, and AI for Strategic Management Practice 296
8.2.1 Network Analysis for Organizational Structure Design 296
8.2.2 Business Process Modeling 301
8.2.3 Improving Manufacturing Productivity Using Analytics 306
8.2.4 How AI Can Address the Soft Side of Organizations 307
8.3 End of Chapter 308
8.3.1 Revision Questions 309
8.3.2 Case Study: Improving Processes in Health Services Using Simulation and Digital Twin 310
References 315
Further Reading 317
9 Performance Measurement System 319
9.1 Measuring Financial Performance 323
9.2 Strategic Controls 327
9.3 Integrated Reporting 328
9.4 Sustainability Reporting 329
9.5 Integrating Management Science, Analytics, and AI for Strategic Management Practice 331
9.5.1 Causal Models to Design Performance Management Systems 331
9.5.2 Implementing the Performance Management System: Analyzing, Reviewing, and Reporting Performance Data â" the Role of Analytics 343
9.5.3 Automating Performance Management Systems Using AI 347
9.6 End of Chapter 347
9.6.1 Revision Questions 348
9.6.2 Case Study: The Impact of Performance Measurement Systems Adoption in Business Performance â" the Shipping Industry Case 349
References 354
Further Reading 356
10 Start- ups 359
10.1 The Components of a Business Plan for a Start- up 362
10.1.1 Management 362
10.1.1.1 Entrepreneur 362
10.1.1.2 Team 363
10.1.1.3 Risk Management 363
10.1.1.4 Growth Strategy and Business Idea as a Competitive Advantage of the Business 364
10.1.2 Market 366
10.1.3 Product/Service and Business Processes 368
10.1.4 Organization Design and Resources 370
10.2 Financial Management 373
10.2.1 Critical Assumptions and Scenarios/Cases for Cash Flow Calculations 373
10.2.2 Breakeven Analysis 374
10.2.3 Projected Profit and Loss (Income) Statement 376
10.2.4 Key Performance Indicators 379
10.2.5 Sources and Amount of Funding 380
10.3 Sustainable Entrepreneurship 382
10.4 AI- based Start- ups 384
10.5 Integrating Management Science, Analytics, and AI for Strategic Management Practice 386
10.5.1 Monte Carlo Simulation 386
10.5.2 Using AI to Create a Business Plan 391
10.6 End of Chapter 394
10.6.1 Revision Questions 395
10.6.2 Case Study: Designing the Next Boutique Winery 396
References 400
Further Reading 402
11 Maturity 405
11.1 Strategies for Mature Organizations 408
11.1.1 Concentrated Growth, and Market and Product Development 408
11.1.2 Integration 414
11.1.3 Diversification 416
11.1.4 Associations With Other Companies: Joint Venture, Strategic Alliances, and Consortia 421
11.2 Integrating Management Science, Analytics, and AI for Strategic Management Practice 424
11.2.1 Linear Optimization 426
11.2.2 Extensions in Linear Programming 428
11.2.2.1 Integer Programming 428
11.2.2.2 Nonlinear Programming 429
11.2.2.3 Programming Under Uncertainty 429
11.2.3 Making the Integration of Organizations Reality Through Internet of Things and Analytics 430
11.2.4 Linear Programming Using AI 431
11.2.5 Digitalization, AI, and New Product Development 431
11.3 End of Chapter 433
11.3.1 Revision Questions 434
11.3.2 Case Study: Choosing the Right Set of Capabilitiesâ" Development Projects to Achieve Multiple Organization Goals 435
References 443
Further Reading 445
12 Regeneration 447
12.1 Strategies for Regenerating Organizations 450
12.1.1 Innovation 450
12.1.2 Turnaround 455
12.1.3 Ambidextrous Strategies 460
12.1.4 Toward a Fully AI- enabled Organization 462
12.2 Integrating Management Science, Analytics, and AI for Strategic Management Practice 467
12.2.1 New Product Development: The Use of Text Analytics 467
12.2.2 Implementing Turnaround Strategies Using Data Envelopment Analysis: Identifying Operational Units for Either Improving or Pruning 470
12.2.3 Sourcing Change Through AI 474
12.3 End of Chapter 474
12.3.1 Revision Questions 475
12.3.2 Case Study: Managing Strategic Change Successfully: the Role of Benefits Realization Management 476
12.3.3 Case Study: A Success Story of Transformation Using AI 480
References 483
Further Reading 486
Index 489
