1. Copyright 2007 Prentice Hall Ch 8-1 Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, & MIS Issues Strategic Management: Concepts & Cases 11 th Edition Fred David

2. Copyright 2007 Prentice Hall Ch 8-2 1. Market segmentation 2. Product positioning Marketing Issues Centrally important to Implementation

3. Copyright 2007 Prentice Hall Ch 8-3 Marketing Mix – Component Factors Service level Warranty Transportation carriers Product line Inventory levels/locations Packaging PublicitySales territoriesBrand name Payment termsSales promotionOutlet locationStyle Discounts & allowances Personal selling Distribution coverage Features LevelAdvertising Distribution channels Quality PricePromotionPlaceProduct

4. Copyright 2007 Prentice Hall Ch 8-4 Marketing Issues Market Segment Basis Psychographic Behavioral Geographic Demographic

5. Copyright 2007 Prentice Hall Ch 8-5 Marketing Issues Product Positioning Customer Wants Customer Needs

6. Copyright 2007 Prentice Hall Ch 8-6 Product Positioning Steps Product Positioning Steps 2. Diagram Map 1. Select Key Criteria 3.Plot competitors’ products 4. Look for niches 5. Develop Marketing Plan

7. Copyright 2007 Prentice Hall Ch 8-7 Product Positioning Map Low Convenience High Customer Loyalty Low Customer Loyalty High Convenience Firm 1 Firm 2 Firm 3 Rental Car Market Low Customer Loyalty High Convenience Firm 1 Firm 2 Firm 3 Rental Car Market

8. Copyright 2007 Prentice Hall Ch 8-8 Acquiring needed capital Developing projected financial statements Preparing financial budgets Evaluating worth of a business Finance/Accounting Issues Essential for implementation

9. Copyright 2007 Prentice Hall Ch 8-9

10. Copyright 2007 Prentice Hall Ch 8-10

11. Copyright 2007 Prentice Hall Ch 8-11 Allow an organization to examine the expected results of various actions and approaches Finance/Accounting Issues Projected Financial Statements

12. Copyright 2007 Prentice Hall Ch 8-12 1. Prepare income statement before balance sheet (forecast sales) 2. Use percentage of sales method to project CoGS & expenses 3. Calculate projected net income Finance/Accounting Issues Steps in Preparing Projected Financial Statements

13. Copyright 2007 Prentice Hall Ch 8-13 4. Subtract dividends to be paid from Net Income and add remaining to Retained Earnings 5. Project balance sheet times beginning with retained earnings 6. List comments (remarks) on projected statements Finance/Accounting Issues Steps in Preparing Projected Financial Statements (cont’d)

14. Copyright 2007 Prentice Hall Ch 8-14 Projected Income Statement for Litten Company (in millions) Prior Year 2005 Projected Year 2006Remarks Projected Income Statement Sales100150.0050% increase Cost of Goods Sold70105.0070% of sales Gross Margin3045.00 Selling Expense1015.0010% of sales Administrative Expense57.505% of sales EBIT1522.50 Interest33.00 EBT1219.50 Taxes69.7550% rate Net Income69.75 Dividends25.00 Retained Earnings44.75

15. Copyright 2007 Prentice Hall Ch 8-15 -- Details how funds will be obtained and spent for a specified period of time Finance/Accounting Issues Financial Budget

16. Copyright 2007 Prentice Hall Ch 8-16 Cash budgets Operating budgets Sales budgets Profit budgets Factory Budgets Expense Budgets Finance/Accounting Issues Types of Budgets

17. Copyright 2007 Prentice Hall Ch 8-17 Divisional budgets Variable budgets Flexible budgets Fixed budgets Finance/Accounting Issues Types of Budgets

18. Copyright 2007 Prentice Hall Ch 8-18 1. What a firm owns 2. What a firm earns 3. What a firm will bring in the market Finance/Accounting Issues Evaluating Worth of a Business: Three Basic Approaches

19. Copyright 2007 Prentice Hall Ch 8-19 Worth of a Business Analysis Southwest Airlines Stockholders’ Equity:$ 5,524 Net Income: 313 Stock Price: 15.70 EPS:.45 Shares Outstanding 784 Company Worth Analysis Stockholders Equity $ 5,524 Net Income x 5 1,565 Share Price/EPS x NI 10,920 # Shares x Share Price 12,309

20. Copyright 2007 Prentice Hall Ch 8-20 1. 1 st firm to market new technological products 2. Innovative imitator of successful products 3. Low-cost producer of similar but less expensive products Research & Development Issues Three Major R&D approaches to implementing strategies

21. Copyright 2007 Prentice Hall Ch 8-21 Information collection, retrieval, & storage Keeping managers informed Coordination of activities among divisions Allow firm to reduce costs MIS Issues Functions of MIS