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Ch 9 -1
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2. Strategic Management: Concepts and Cases
Arab World Edition
Fred R. David
Abbas J. Ali
Abdulrahman Y. Al-Aali
Chapter 9:
Implementing Strategies:
Marketing, Finance /
Accounting, R&D, and MIS
Issues
Ch 9 -2
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Chapter Outline
The Nature of Strategy Implementation
Marketing Issues
Finance/Accounting Issues
Research & Development (R&D) Issues
Management Information Systems (MIS) Issues
Ch 9 -3
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Implementing Strategies
“The greatest strategy is doomed if it’s implemented badly.”
– Bernard Reimann
“Without planning and integrated studies for our investment projects, we certainly lose our competitive edge.”
– Abdul Rahman Bin Ali Al Jeraisy Chairman, Al Jeraisy Group
Ch 9 -4
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Source: Adapted from Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22,
no. 3 (June 1988) 40.
Ch 9 -5
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The Nature of Strategy Implementation
Strategy implementation means change
Less than 10% of strategies formulated are successfully implemented!
Ch 9 -6
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The Nature of Strategy Implementation
Reasons for the low success rate of strategy implementation:
Failing to segment markets appropriately
Paying too much for a new acquisition
Falling behind competition in R&D
Not recognizing benefit of computers in managing information
Ch 9 -7
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The Nature of Strategy Implementation
Ways to successful Strategy Implementation:
Market goods & services well
Raise needed working capital
Produce technologically sound goods
Sound information systems
Ch 9 -8
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9. Copyright © 2011 Pearson Education
Marketing Issues
Marketing variables affect success/failure of strategy implementation
Ch 9 -9
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Marketing Issues
Marketing decisions requiring policies:
Whether to use exclusive dealerships – multiple channels of distribution
Whether to use heavy, light, or no TV advertising
Whether to reward sales people
Whether to be a price leader or price follower
Whether to advertise online or not
Ch 9 -10
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Marketing Issues
Centrally important to implementation:
Market segmentation
Product positioning
Ch 9 -11
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Marketing Issues
Market Segmentation
Subdividing of a market into distinct subsets of customers according to needs and buying habits
Ch 9 -12
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Marketing Issues
Market Segmentation (cont’d)
Things that directly affect marketing mix variables:
Product
Place
Promotion
Price
Ch 9 -13
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Marketing Issues
Geographic
Demographic
Market Segment Basis
Psychographic
Behavioral
Ch 9 -14
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Marketing Issues
Product Positioning
Schematic representations that reflect how products/services compare to competitors’ on dimensions most important to success in the industry
Ch 9 -15
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16. Product Positioning Steps
Select Key Criteria
2. Diagram Map
Product-Positioning
Steps
3. Plot Competitors’
Products
4. Look for Niches
5. Develop Marketing Plan
Ch 9 -16
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Ch 9 -17
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Marketing Issues
Product Positioning as Strategy Implementation Tool
Look for vacant niche
Avoid sub optimization
Don’t serve 2 segments with same strategy
Don’t position in the middle of the map
Ch 9 -18
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Finance/Accounting Issues
Central to strategy implementation
Ch 9 -19
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Finance/Accounting Issues
Essential for Implementation
Acquiring needed capital
Developing projected financial statements
Preparing financial budgets
Evaluating worth of a business
Ch 9 -20
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Finance/Accounting Issues
Decisions Based on Finance/Accounting
Raise capital – short-term, long-term, preferred, or common stock
Lease or buy fixed assets
Determine appropriate dividend payout ratio
Establish % discount on accounts for terms
Determine the amount of cash kept on hand
Ch 9 -21
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Finance/Accounting Issues
Capital Acquisition to Implement Strategies
Debt
Equity
Ch 9 -22
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Finance/Accounting Issues
Projected Financial Statements
Allow an organization to examine the expected results of various actions and approaches
Ch 9 -23
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Finance/Accounting Issues
Financial Budget
Details how funds will be obtained and spent for a specified period of time
Ch 9 -24
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25. Finance/Accounting Issues
Types of Budgets
Cash budgets
Operating budgets
Sales budgets
Profit budgets
Factory budgets
Expense budgets
Divisional budgets
Variable budgets
Flexible budgets
Fixed budgets
Ch 9 -25
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Finance/Accounting Issues
Evaluating Worth of a Business
Three Basic Approaches:
What a firm owns
What a firm earns
What a firm will bring in the market
Ch 9 -26
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Research & Development Issues
New products and improvement of existing products that allow for effective strategy implementation.
Ch 9 -27
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Research & Development Issues
Constraints
Level of support constrained by resource availability
Technological improvements shorten product life cycles
Ch 9 -28
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Research & Development Issues
Three Major R&D Approaches to Implementing Strategies
1st firm to market new technological products
Innovative imitator of successful products
Low-cost producer of similar but less expensive products
Ch 9 -29
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Management Information Systems (MIS) Issues
Information is the basis for understanding the firm. It’s one of the most important factors differentiating successful from unsuccessful firms.
Ch 9 -30
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MIS Issues
Functions of MIS
Information collection, retrieval/ feedback , and storage
Keeping managers informed
Coordination of activities among divisions
Allow firm to reduce costs
Ch 9 -31
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