1. Ch 8-1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues Strategic Management: Concepts & Cases 12 th Edition Fred David

2. Ch 8-2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Outline The Nature of Strategy Implementation Marketing Issues Finance/Accounting Issues

3. Ch 8-3 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Outline ( cont’d ) Research & Development (R&D) Issues Management Information Systems (MIS) Issues

4. Ch 8-4 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall “The greatest strategy is doomed if it’s implemented badly.” – Bernard Reimann Implementing Strategies

5. Ch 8-5 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

6. Ch 8-6 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall – Strategy implementation means change The Nature of Strategy Implementation

7. Ch 8-7 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall – Less than 10% of strategies formulated are successfully implemented! The Nature of Strategy Implementation

8. Ch 8-8 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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 The Nature of Strategy Implementation Low Success Rate – Strategy Implementation

9. Ch 8-9 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Market goods & services well Raise needed working capital Produce technologically sound goods Sound information systems The Nature of Strategy Implementation Successful Strategy Implementation

10. Ch 8-10 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues – Marketing variables affect success/failure of strategy implementation

11. Ch 8-11 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Exclusive dealerships – multiple channels of distribution Heavy, light, or no TV advertising Price leader or price follower Advertise online or not Offer complete or limited warranty Marketing Issues Marketing decisions requiring policies

12. Ch 8-12 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1. Market segmentation 2. Product positioning Marketing Issues Centrally important to Implementation

13. Ch 8-13 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Subdividing of a market into distinct subsets of customers according to needs and buying habits Marketing Issues Market Segmentation

14. Ch 8-14 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Key to matching supply & demand Market-development, product-development, market-penetration, and diversification strategies Allows operating with limited resources Enables small firms to compete successfully Marketing Issues Market Segmentation

15. Ch 8-15 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Directly affect marketing mix variables:  Product  Place  Promotion  Price Marketing Issues Market Segmentation

16. Ch 8-16 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

17. Ch 8-17 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues Market Segment Basis Psychographic Behavioral Geographic Demographic

18. Ch 8-18 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Region County size City or SMSA size Density Climate Marketing Issues Geographic

19. Ch 8-19 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues Market Segment Basis Psychographic Behavioral Geographic Demographic

20. Ch 8-20 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Age Family size Family life cycle Income/occupation Education Religion Race/nationality Marketing Issues Demographic

21. Ch 8-21 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues Market Segment Basis Psychographic Behavioral Geographic Demographic

22. Ch 8-22 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Social class Lifestyle Personality Marketing Issues Psychographic

23. Ch 8-23 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues Market Segment Basis Psychographic Behavioral Geographic Demographic

24. Ch 8-24 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Use occasion Benefits sought User status Usage rate Loyalty status Readiness stage Attitude toward product Marketing Issues Behavioral

25. Ch 8-25 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues – Schematic representations that reflect how products/services compare to competitors’ on dimensions most important to success in the industry Product Positioning

26. Ch 8-26 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

27. Ch 8-27 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Issues Product Positioning Customer Wants Customer Needs

28. Ch 8-28 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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

29. Ch 8-29 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

30. Ch 8-30 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

31. Ch 8-31 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

32. Ch 8-32 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

33. Ch 8-33 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Look for vacant niche Avoid suboptimization Don’t serve 2 segments with same strategy Don’t position in the middle of the map Marketing Issues Product Positioning as Strategy Implementation Tool

34. Ch 8-34 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Finance/Accounting Issues – Central to strategy implementation

35. Ch 8-35 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Acquiring needed capital Developing projected financial statements Preparing financial budgets Evaluating worth of a business Finance/Accounting Issues Essential for Implementation

36. Ch 8-36 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Raise capital – short-term, long-term, preferred, or common stock Lease or buy fixed assets Determine appropriate dividend payout ratio Finance/Accounting Issues Decisions Based on Finance/Accounting

37. Ch 8-37 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall LIFO, FIFO, or market-value accounting approach Extend time of AR Establish % discount on accounts for terms Determine the amount of cash kept on hand Finance/Accounting Issues Decisions Based on Finance/Accounting

38. Ch 8-38 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Debt Equity Finance/Accounting Issues Capital Acquisition to Implement Strategies

39. Ch 8-39 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall EPS/EBIT analysis  Earnings per share/earnings before interest and taxes Finance/Accounting Issues Debt vs. Equity Decisions

40. Ch 8-40 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

41. Ch 8-41 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

42. Ch 8-42 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Allow an organization to examine the expected results of various actions and approaches Finance/Accounting Issues Projected Financial Statements

43. Ch 8-43 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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

44. Ch 8-44 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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)

45. Ch 8-45 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

46. Ch 8-46 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall – Details how funds will be obtained and spent for a specified period of time Finance/Accounting Issues Financial Budget

47. Ch 8-47 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Cash budgets Operating budgets Sales budgets Profit budgets Factory budgets Expense budgets Finance/Accounting Issues Types of Budgets

48. Ch 8-48 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Divisional budgets Variable budgets Flexible budgets Fixed budgets Finance/Accounting Issues Types of Budgets

49. Ch 8-49 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Central to strategy implementation – integrative, intensive, and diversification strategies often implemented through acquisitions of other firms Finance/Accounting Issues Evaluating Worth of a Business

50. Ch 8-50 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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

51. Ch 8-51 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

52. Ch 8-52 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Research & Development Issues – New products and improvement of existing products that allow for effective strategy implementation

53. Ch 8-53 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Level of support constrained by resource availability Technological improvements shorten product life cycles Research & Development Issues Constraints

54. Ch 8-54 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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

55. Ch 8-55 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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.

56. Ch 8-56 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Information collection, retrieval, and storage Keeping managers informed Coordination of activities among divisions Allow firm to reduce costs MIS Issues Functions of MIS

57. Ch 8-57 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Key Terms & Concepts For Review (Chapter 8) Cash BudgetMarketing Mix Variables EPS/EBIT Analysis Outstanding Shares Method Management Information Systems (MIS) Price-Earnings Ratio Method Market SegmentationProduct Positioning

58. Ch 8-58 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Key Terms & Concepts For Review (Chapter 8) Projected Financial Statement Analysis Research & Development (R&D) Vacant Niche

59. Ch 8-59 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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.