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Ch 5 -1 Chapter 5 Strategies in Action Strategic Management: Concepts & Cases 13 th Edition Fred David.

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Presentation on theme: "Ch 5 -1 Chapter 5 Strategies in Action Strategic Management: Concepts & Cases 13 th Edition Fred David."— Presentation transcript:

1 Ch 5 -1 Chapter 5 Strategies in Action Strategic Management: Concepts & Cases 13 th Edition Fred David

2 Ch 5 -2

3 Ch 5 -3 Long Term Objectives Quantitative Measurable Realistic Understandable Challenging Hierarchical Obtainable Congruent

4 Ch 5 -4

5 Ch 5 -5

6 Ch 5 -6 Financial vs. Strategic Objectives Financial Objectives Growth in revenues Growth in earnings Higher dividends Larger profit margins Greater ROI Higher earnings per share Rising stock price Improved cash flow

7 Ch 5 -7 Financial vs. Strategic Objectives Strategic Objectives Larger market share Quicker on-time delivery than rivals Shorter design-to-market times than rivals Lower costs than rivals Higher product quality than rivals Wider geographic coverage than rivals Achieving technological leadership Consistently getting new or improved products to market ahead of rivals

8 Ch 5 -8 Not Managing by Objectives Managing by Extrapolation – If it aint broke, dont fix it Managing by Crisis – The true measure of a good strategist is the ability to fix problems Managing by Subjectives – Do your own thing, the best way you know how Managing by Hope – The future is full of uncertainty and if at first you dont succeed, then you may on the second or third try

9 Ch 5 -9 The Balanced Scorecard Robert Kaplan & David Norton – Strategy evaluation & control technique Balance financial measures with nonfinancial measures Balance shareholder objectives with customer & operational objectives

10 Ch Levels of Strategies – Large Company

11 Ch Levels of Strategies – Small Company

12 Ch Types of Strategies Vertical Integration Strategies Forward Integration Backward Integration Horizontal Integration

13 Ch Vertical Integration Strategies Forward Integration Gaining ownership or increased control over distributors or retailers Backward Integration Seeking ownership or increased control of a firms suppliers Horizontal Integration Seeking ownership or increased control over competitors

14 Ch Types of Strategies Intensive Strategies Market Penetration Market Development Product Development

15 Ch Intensive Strategies Market Penetration Seeking increased market share for present products or services in present markets through greater marketing efforts Market Development Introducing present products or services into new geographic areas Product Development Seeking increased sales by improving present products or services or developing new ones

16 Ch Types of Strategies Diversification Strategies Related Diversification Unrelated Diversification

17 Ch Diversification Strategies Related Diversification Adding new but related products or services Unrelated Diversification Adding new, unrelated products or services

18 Ch Types of Strategies Defensive Strategies Retrenchment Divestiture Liquidation

19 Ch Defensive Strategies Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profit Divestiture Selling a division or part of an organization Liquidation Selling all of a companys assets, in parts, for their tangible worth

20 Ch Porters Five Generic Strategies Type 1 Cost Leadership – Low cost Type 2 Cost Leadership – Best value Type 3 Differentiation Type 4 Focus – Low cost Type 5 Focus – Best value

21 Ch 5 -21

22 Ch Type 1 or 2 Cost Leadership Strategy Conditions Vigorous price competition Plentiful supply of identical products Little product differentiation Products used in same ways Low cost to switch Large buyers with power Industry newcomers use low prices to attract buyers

23 Ch Type 3 Differentiation Strategy Conditions Many ways to differentiate and buyers perceive the differences as having value Diverse buyer needs and uses Few rival firms following similar differentiation approach Fast paced technological change and evolving product features

24 Ch Type 4 or 5 Focus Strategy Conditions Large, profitable, and growing target market niche Industry leaders do not consider the niche crucial to their success Industry leaders consider it costly or difficult to meet the needs of this niche Industry has many niches and segments Few rivals are specializing on this target segment

25 Ch Means for Achieving Strategies Cooperation among competitors Joint venture / partnering Merger / acquisition First mover advantages Outsourcing

26 Ch Strategic Management in Nonprofit and Governmental Organizations Educational Institutions Medical Organizations Governmental Agencies and Departments


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