Strategic Management: Strategic Concepts & Cases 11th Management: Edition Fred David
Concepts & Cases PowerPoint Slides by 11th Edition Anthony F. Chelte Western NewDavid College Fred England
Revised by Azhar Kazmi KFUPM Dhahran
Ch 8-1
Ch 8-2
Ch 8-3
Marketing goods & services well Raising needed working capital Producing technologically sound goods Creating sound information systems
Ch 8-4
Marketing Issues
Marketing variables affect success/failure of strategy implementation
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
Ch 8-5
Marketing Issues
Two marketing variables centrally important to strategy implementation are:
1.
2.
Ch 8-6
Market segmentation is the subdividing of a market into distinct subsets of customers according to needs and buying habits
Key to matching supply & demand Market development, product-development, market penetration & diversification strategies require increased sales through new products/markets Allows operating with limited resources Enables small firms to compete successfully
Ch 8-7
Ch 8-8
Place Distribution channels Distribution coverage Outlet location Sales territories Inventory levels/locations Transportation carriers
Demographic
Psychographic
Behavioral
Ch 8-10
Demographic: Age Family Size Family Life Cycle Income/Occupation Education Religion Race/Nationality Psychographic: Social Class Lifestyle Personality
Ch 8-11
Ch 8-12
5. Develop Marketing Plan to position companys product/services Copyright 2007 Prentice Hall
Ch 8-13
Average Specialty chain Low price Average mass merchandizer or discounter Average Department store Conservative, Everyday menswear Copyright 2007 Prentice Hall
Ch 8-14
High price
Marketing Issues
Product Positioning as Strategy Implementation Tool
Look for vacant niche as the best opportunity may be unserved segment Avoid sub optimization by squatting between two segments Dont serve two segments with the same strategy Dont position in the middle of the map
Ch 8-15
Finance/Accounting Issues
Financial/Accounting issues are central to strategy implementation Examples of financial/accounting issues essential for implementation Acquiring needed capital Developing projected financial statements Preparing financial budgets Evaluating worth of a business
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Ch 8-16
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 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
Ch 8-17
Finance/Accounting Issues
Successful strategy implementation often requires additional capital.
Sources of capital to implement strategies (besides net profit from operations and sales of assets) are:
Debt Equity
Determining the appropriate mix of debt and equity in a firms capital structure can be vital to successful strategy implementation
Copyright 2007 Prentice Hall
Ch 8-18
EPS/EBIT analysis involves an examination of the impact of debt versus equity financing on earnings per share
Ch 8-20
Ch 8-21
Finance/Accounting Issues
Projected Financial Statements
Projected financial statements analysis enables an organization to examine the expected results of various actions and approaches in strategy implementation.
Ch 8-22
Projected Income Statement Sales Cost of Goods Sold Gross Margin Selling Expense Administrative Expense EBIT Interest EBT Taxes Net Income Dividends Retained Earnings 100 70 30 10 5 15 3 12 6 6 2 4 150.00 105.00 45.00 15.00 7.50 22.50 3.00 19.50 9.75 9.75 5.00 4.75 50% rate 10% of sales 5% of sales 50% increase 70% of sales
Ch 8-23
Finance/Accounting Issues
Evaluating Worth of a Business Central to strategy implementation integrative, intensive, & diversification strategies often implemented through acquisitions of other firms Three basic approaches to evaluating a business: What a firm owns: net worth or stockholders equity What a firm earns: future benefits through net profits What a firm will bring in the market when sold
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Ch 8-25
Be the first firm to market new technological products Be an innovative imitator of successful products Be a low-cost producer by mass producing products similar to but less expensive than products recently introduced
Ch 8-28
Firms that gather, assimilate, and evaluate external and internal information more effectively gain competitive advantage over other firms Information is the basis for understanding the firm. It is one of the most important factors differentiating successful from unsuccessful firms Strategic management process is greatly facilitated greatly in firms having an effective information system
Ch 8-29
MIS Issues
Functions of MIS
Information collection, retrieval, & storage can be used to create competitive advantage. Examples of such actions are: Cross-selling to customers Monitoring suppliers Keeping managers and employees informed Coordination of activities among divisions Allow firm to reduce costs
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Ch 8-30