1. Strategic Management: Concepts & Cases
Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, & MIS Issues
Strategic Management: Concepts & Cases
11th Edition
Fred David
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2. Marketing Issues Centrally important to Implementation
Market segmentation
Product positioning
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3. Marketing Mix – Component Factors
Service level
Warranty
Transportation carriers
Product line
Inventory levels/locations
Packaging
Publicity
Sales territories
Brand name
Payment terms
Sales promotion
Outlet location
Style
Discounts & allowances
Personal selling
Distribution coverage
Features
Level
Advertising
Distribution channels
Quality
Price
Promotion
Place
Product
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4. Marketing Issues Market Segment Basis Geographic Demographic
Psychographic
Behavioral
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5. Marketing Issues Product Positioning Customer Wants Customer Needs
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6. Product Positioning Steps
1. Select Key Criteria
2. Diagram Map
Product
Positioning
Steps
Plot competitors’
products
4. Look for niches
5. Develop Marketing Plan
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7. Product Positioning Map
High
Convenience
High
Convenience
Rental Car Market
Rental Car Market
Firm 1 •
Firm 1 • •
Firm 2 •
Firm 2
High
Customer
Loyalty
Low
Customer
Loyalty
Low
Customer
Loyalty •
Firm 3 •
Firm 3
Low
Convenience
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8. Finance/Accounting Issues
Essential for implementation
Acquiring needed capital
Developing projected financial statements
Preparing financial budgets
Evaluating worth of a business
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9. Finance/Accounting Issues
Projected Financial Statements
Allow an organization to examine the expected results of various actions and approaches
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10. Finance/Accounting Issues
Steps in Preparing Projected Financial Statements
Prepare income statement before balance sheet (forecast sales)
Use percentage of sales method to project CoGS & expenses
Calculate projected net income
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11. Finance/Accounting Issues
Steps in Preparing Projected Financial Statements (cont’d)
Subtract dividends to be paid from Net Income and add remaining to Retained Earnings
Project balance sheet times beginning with retained earnings
List comments (remarks) on projected statements
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12. Projected Income Statement for Litten Company (in millions)
Prior Year 2005
Projected 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
Dividends 2
5.00
Retained Earnings 4
4.75
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13. Finance/Accounting Issues
Financial Budget
-- Details how funds will be obtained and spent for a specified period of time
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14. Finance/Accounting Issues
Types of Budgets
Cash budgets
Operating budgets
Sales budgets
Profit budgets
Factory Budgets
Expense Budgets
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15. Finance/Accounting Issues
Types of Budgets
Divisional budgets
Variable budgets
Flexible budgets
Fixed budgets
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16. Finance/Accounting Issues
Evaluating Worth of a Business:
Three Basic Approaches
What a firm owns
What a firm earns
What a firm will bring in the market
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17. Research & Development Issues
Three Major R&D approaches to implementing strategies
1st firm to market new technological products
Innovative imitator of successful products
Low-cost producer of similar but less expensive products
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18. MIS Issues Functions of MIS
Information collection, retrieval, & storage
Keeping managers informed
Coordination of activities among divisions
Allow firm to reduce costs
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