1. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -1 Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues Strategic Management: Concepts & Cases 13 th Edition Fred David

2. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -2

3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -3 “The greatest strategy is doomed if it’s implemented badly.” – Bernard Reimann Implementing Strategies

4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -4 Less than 10% of strategies formulated are successfully implemented! The Nature of Strategy Implementation

5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 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 Issues Marketing decisions requiring policies

6. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -6

7. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -7 Current Marketing Issues Advertising media Purpose-based marketing

8. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -8 Market segmentation Product positioning Marketing Issues

9. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -9 Subdividing of a market into distinct subsets of customers according to needs and buying habits Marketing Issues Market Segmentation

10. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -10 Market Segmentation Market Segment Basis Psychographic Behavioral Geographic Demographic

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

12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -12 Product Place Promotion Price Marketing Mix Variables

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

14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -14 Product Positioning Steps 1. Select key criteria 2. Diagram map 3. Plot competitors’ products 4. Look for niches 5. Develop marketing plan

15. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -15 Product-Positioning Map for Banks Personal Impersonal AggressiveConservative Bank A Bank B Bank C Bank D Bank E

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

17. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -17 Product-Positioning Map for Menswear Retail Stores Very latest, fashionable menswear Conservative, everyday menswear Low PriceHigh Price Average department store Average specialty chain Average mass merchandiser or discounter

18. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -18 Product-Positioning Map for the Rental Car Market High Convenience Low Convenience High Customer Loyalty Low Customer Loyalty Firm 1 Firm 2 Firm 3

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

20. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -20 Finance/Accounting Issues Acquiring needed capital Developing projected financial statements Preparing financial budgets Evaluating the worth of a business

21. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 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 Finance/Accounting Issues

22. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -22 EPS/EBIT analysis  Earnings per share/earnings before interest and taxes Finance/Accounting Issues Debt vs. Equity Decisions

23. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -23

24. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -24 Allows an organization to examine the expected results of various actions and approaches Finance/Accounting Issues Projected Financial Statement Analysis

25. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 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 Finance/Accounting Issues Steps in Preparing Projected Financial Statements

26. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -26 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 Issues Steps in Preparing Projected Financial Statements (cont’d)

27. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -27 Projected Income Statement

28. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -28 Projected Balance Sheet

29. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -29 Details how funds will be obtained and spent for a specified period of time Finance/Accounting Issues Financial Budget

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

31. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -31 Central to strategy implementation – integrative, intensive, and diversification strategies often implemented through acquisitions of other firms Finance/Accounting Issues Evaluating Worth of a Business

32. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -32 1. What a firm owns 2. What a firm earns 3. What a firm will bring in the market Evaluating Worth of a Business Three Basic Approaches

33. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -33 Evaluating Worth of a Business 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

34. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -34

35. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -35 Research & Development Issues New products and improvement of existing products that allow for effective strategy implementation

36. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -36 Level of support constrained by resource availability Technological improvements shorten product life cycles Research & Development Issues Constraints

37. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 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 Issues Three Major R&D Approaches to Implementing Strategies

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

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

40. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 8 -40 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.