copyright 2007 prentice hall ch 8-1 chapter 8 implementing strategies: marketing,...
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Copyright 2007 Prentice Hall Ch 8-1
Chapter 8Implementing Strategies: Marketing, Finance/Accounting, R&D, & MIS Issues
Strategic Management:
Concepts & Cases
11th Edition
Fred David
Copyright 2007 Prentice Hall Ch 8-2
1. Market segmentation
2. Product positioning
Marketing Issues
Centrally important to Implementation
Copyright 2007 Prentice Hall Ch 8-3
Marketing Mix – Component Factors
Service level
Warranty
Transportation carriers
Product line
Inventory levels/locations
Packaging
PublicitySales territoriesBrand name
Payment termsSales promotionOutlet locationStyle
Discounts & allowances
Personal sellingDistribution coverage
Features
LevelAdvertisingDistribution channels
Quality
PricePromotionPlaceProduct
Copyright 2007 Prentice Hall Ch 8-4
Marketing Issues
Market SegmentBasis PsychographicPsychographic
BehavioralBehavioral
GeographicGeographic
DemographicDemographic
Copyright 2007 Prentice Hall Ch 8-5
Marketing Issues
ProductPositioning
Customer WantsCustomer Wants
Customer NeedsCustomer Needs
Copyright 2007 Prentice Hall Ch 8-6
Product Positioning Steps
ProductPositioning
Steps
2. Diagram Map
1. Select Key Criteria
3. Plot competitors’products
4. Look for niches
5. Develop Marketing Plan
Copyright 2007 Prentice Hall Ch 8-7
Product Positioning Map
LowConvenience
HighCustomerLoyalty
LowCustomerLoyalty
HighConvenience
Firm 1•
•Firm 2
• Firm 3
Rental Car Market
LowCustomerLoyalty
HighConvenience
Firm 1•
•Firm 2
• Firm 3
Rental Car Market
Copyright 2007 Prentice Hall Ch 8-8
Acquiring needed capital Developing projected financial statements Preparing financial budgets Evaluating worth of a business
Finance/Accounting Issues
Essential for implementation
Copyright 2007 Prentice Hall Ch 8-9
Copyright 2007 Prentice Hall Ch 8-10
Copyright 2007 Prentice Hall Ch 8-11
Allow an organization to examine the expected results of various actions and approaches
Finance/Accounting Issues
Projected Financial Statements
Copyright 2007 Prentice Hall Ch 8-12
1. Prepare income statement before balance sheet (forecast sales)
2. Use percentage of sales method to project CoGS & expenses
3. Calculate projected net income
Finance/Accounting Issues
Steps in Preparing Projected Financial Statements
Copyright 2007 Prentice Hall Ch 8-13
4. Subtract dividends to be paid from Net Income and add remaining to Retained Earnings
5. Project balance sheet times beginning with retained earnings
6. List comments (remarks) on projected statements
Finance/Accounting Issues
Steps in Preparing Projected Financial Statements (cont’d)
Copyright 2007 Prentice Hall Ch 8-14
Projected Income Statement for Litten Company (in millions)
Prior Year 2005Projected Year
2006 Remarks
Projected Income Statement
Sales 100 150.00 50% increase
Cost of Goods Sold 70 105.00 70% of sales
Gross Margin 30 45.00
Selling Expense 10 15.00 10% of sales
Administrative Expense 5 7.50 5% of sales
EBIT 15 22.50
Interest 3 3.00
EBT 12 19.50
Taxes 6 9.75 50% rate
Net Income 6 9.75
Dividends 2 5.00
Retained Earnings 4 4.75
Copyright 2007 Prentice Hall Ch 8-15
-- Details how funds will be obtained and spent for a specified period of time
Finance/Accounting Issues
Financial Budget
Copyright 2007 Prentice Hall Ch 8-16
Cash budgets Operating budgets Sales budgets Profit budgets Factory Budgets Expense Budgets
Finance/Accounting Issues
Types of Budgets
Copyright 2007 Prentice Hall Ch 8-17
Divisional budgets Variable budgets Flexible budgets Fixed budgets
Finance/Accounting Issues
Types of Budgets
Copyright 2007 Prentice Hall Ch 8-18
1. What a firm owns2. What a firm earns3. What a firm will bring in the market
Finance/Accounting Issues
Evaluating Worth of a Business:
Three Basic Approaches
Copyright 2007 Prentice Hall Ch 8-19
Worth of a Business Analysis
Southwest AirlinesStockholders’ Equity: $ 5,524Net Income: 313Stock Price: 15.70EPS: .45Shares Outstanding 784
Company Worth AnalysisStockholders Equity $ 5,524Net Income x 5 1,565Share Price/EPS x NI 10,920# Shares x Share Price 12,309
Copyright 2007 Prentice Hall Ch 8-20
1. 1st firm to market new technological products2. Innovative imitator of successful products3. Low-cost producer of similar but less
expensive products
Research & Development Issues
Three Major R&D approaches to implementing strategies
Copyright 2007 Prentice Hall Ch 8-21
Information collection, retrieval, & storage Keeping managers informed Coordination of activities among divisions Allow firm to reduce costs
MIS Issues
Functions of MIS