David sm13 ppt_08

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 8 -1

Chapter 8Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues

Strategic Management: Concepts & Cases

13th EditionFred David


Ch 8 -2


Ch 8 -3

“The greatest strategy is doomed if it’s implemented badly.” – Bernard Reimann

Implementing Strategies


Ch 8 -4

Less than 10% of strategies formulated are successfully implemented!

The Nature of Strategy Implementation


Ch 8 -5

Exclusive dealerships or multiple channels of distribution

Heavy, light, or no TV advertising To limit or not the share of business with a single

customer Price leader or price follower Offer complete or limited warranty Reward salespeople with commission or salary Advertise online or not

Marketing IssuesMarketing decisions requiring policies


Ch 8 -6


Ch 8 -7

Current Marketing Issues

Advertising media

Purpose-based marketing


Ch 8 -8

Market segmentation

Product positioning

Marketing Issues


Ch 8 -9

Subdividing of a market into distinct subsets of customers according to needs and buying habits

Marketing Issues

Market Segmentation


Ch 8 -10

Market Segmentation

Market SegmentBasis Psychographic

Behavioral

Geographic

Demographic


Ch 8 -11

Market-development, product-development, market-penetration, and diversification strategies require market segmentation

Market segmentation allows operating with limited resources; enables small firms to compete successfully

Market segmentation decisions affect marketing mix variables

Market Segmentation


Ch 8 -12

Product Place Promotion Price

Marketing Mix Variables


Ch 8 -13

Marketing Issues

Schematic representations that reflect how products/services compare to competitors’ on dimensions most important to success in the industry

Product Positioning


Ch 8 -14

Product Positioning Steps

1. Select key criteria2. Diagram map3. Plot competitors’ products4. Look for niches5. Develop marketing plan


Ch 8 -15

Product-Positioning Map for Banks

Personal

Impersonal

Aggressive Conservative

Bank A

Bank B

Bank C

Bank D

Bank E


Ch 8 -16

Product-Positioning Map for Personal Computers

High Capability

Low Capability

Good Customer Service

Bad Customer Service

Firm 1

Firm 2

Firm 3

Firm 4


Ch 8 -17

Product-Positioning Map for Menswear Retail Stores

Very latest, fashionable menswear

Conservative, everyday menswear

Low Price High Price

Average department store

Average specialty chain

Average mass merchandiser or discounter


Ch 8 -18

Product-Positioning Map for the Rental Car Market

High Convenience

Low Convenience

High Customer Loyalty

Low Customer Loyalty

Firm 1Firm 2

Firm 3


Ch 8 -19

Look for a vacant niche Don’t serve two segments with

the same strategy Don’t position yourself in the

middle of the map

Product Positioning


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Finance/Accounting Issues

Acquiring needed capital Developing projected financial

statements Preparing financial budgets Evaluating the worth of a business


Ch 8 -21

Raise capital – short-term debt, long-term debt, preferred, or common stock

Lease or buy fixed assets Determine appropriate dividend payout

ratio LIFO, FIFO, or market-value accounting Timeframe of accounts receivable Discounts on accounts Amount of cash to be kept on hand



Ch 8 -22

EPS/EBIT analysis Earnings per share/earnings before interest

and taxes

Finance/Accounting IssuesDebt vs. Equity Decisions


Ch 8 -23


Ch 8 -24

Allows an organization to examine the expected results of various actions and approaches


Projected Financial Statement Analysis


Ch 8 -25

1. Prepare income statement before balance sheet (forecast sales)

2. Use percentage of sales method to project CGS & expenses

3. Calculate projected net income


Steps in Preparing Projected Financial Statements


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4. Subtract dividends to be paid from net income and add remaining to retained earnings

5. Project balance sheet items beginning with retained earnings

6. List comments (remarks) on projected statements

Finance/Accounting IssuesSteps in Preparing Projected Financial Statements (cont’d)


Ch 8 -27

Projected Income Statement


Ch 8 -28

Projected Balance Sheet


Ch 8 -29

Details how funds will be obtained and spent for a specified period of time


Financial Budget


Ch 8 -30

Types of Budgets

Cash budgets Operating budgets Sales budgets Profit budgets Factory budgets Capital budgets

Expense budgets Divisional budgets Variable budgets Flexible budgets Fixed budgets


Ch 8 -31

Central to strategy implementation – integrative, intensive, and diversification strategies often implemented through acquisitions of other firms


Evaluating Worth of a Business


Ch 8 -32

1. What a firm owns

2. What a firm earns

3. What a firm will bring in the market


Three Basic Approaches


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Net worth or stockholder’s equity Net profit – conservative value

would be five times the firm’s current annual profits

Price-earnings ratio method Outstanding shares method


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Ch 8 -35

Research & Development Issues

New products and improvement of existing products that allow for effective strategy implementation


Ch 8 -36

Level of support constrained by resource availability

Technological improvements shorten product life cycles

Research & Development Issues

Constraints


Ch 8 -37

1. First firm to market new technological products

2. Innovative imitator of successful products

3. Low-cost producer of similar but less expensive products

Research & Development IssuesThree Major R&D Approaches to Implementing Strategies


Ch 8 -38

Management Information Systems (MIS) Issues

Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms.


Ch 8 -39

Information collection, retrieval, and storage

Keeping managers informed Coordination of activities among divisions Allows firm to reduce costs

MIS Issues

Functions of MIS


Ch 8 -40

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Technology

David sm13 ppt_08