1. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -1 Chapter 5 Strategies in Action Strategic Management: Concepts & Cases 13 th Edition Fred David

2. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -2

3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -3 Long Term Objectives Quantitative Measurable Realistic Understandable Challenging Hierarchical Obtainable Congruent

4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -4

5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -5 Financial vs. Strategic Objectives Financial Objectives Growth in revenues Growth in earnings Higher dividends Larger profit margins Greater ROI Higher earnings per share Rising stock price Improved cash flow

6. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -6 The Balanced Scorecard Robert Kaplan & David Norton – Strategy evaluation & control technique Balance financial measures with nonfinancial measures Balance shareholder objectives with customer & operational objectives

7. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -7 Levels of Strategies – Large Company

8. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -8 Levels of Strategies – Small Company

9. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -9 Types of Strategies Vertical Integration Strategies Forward Integration Backward Integration

10. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -10 Vertical Integration Strategies Forward Integration Gaining ownership or increased control over distributors or retailers Backward Integration Seeking ownership or increased control of a firm’s suppliers

11. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -11 Types of Strategies Intensive Strategies Market Penetration Market Development Product Development

12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -12 Intensive Strategies Market Penetration Seeking increased market share for present products or services in present markets through greater marketing efforts Market Development Introducing present products or services into new geographic areas Product Development Seeking increased sales by improving present products or services or developing new ones

13. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -13 Types of Strategies Diversification Strategies Related Diversification Unrelated Diversification

14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -14 Diversification Strategies Related Diversification Adding new but related products or services Unrelated Diversification Adding new, unrelated products or services

15. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -15 Types of Strategies Defensive Strategies Retrenchment Divestiture Liquidation

16. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -16 Defensive Strategies Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profit Divestiture Selling a division or part of an organization Liquidation Selling all of a company’s assets, in parts, for their tangible worth

17. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 5 -17 Porter’s Five Generic Strategies Type 1 Cost Leadership – Low cost Type 2 Cost Leadership – Best value Type 3 Differentiation Type 4 Focus – Low cost Type 5 Focus – Best value