Module 8

Implementing Strategies: Marketing,

Finance/Accounting, R&D, and MIS Issues

Ch 8 -1

Ch 8 -2

Implementing Strategies

The greatest strategy is doomed

if its implemented badly.
Bernard Reimann

Ch 8 -3

The Nature of Strategy

Implementation
Less than 10% of strategies formulated
are successfully implemented!

Ch 8 -4

Marketing Issues
Marketing decisions requiring policies

Exclusive dealerships or multiple channels of

distribution
Heavy, light, or no TV advertising
To limit or not the share of business with a single
customer
Price leader or price follower
Offer complete or limited warranty
Reward salespeople with commission or salary
Advertise online or not
Ch 8 -5

Ch 8 -6

Current Marketing Issues

Advertising media

Purpose-based marketing

Ch 8 -7

Marketing Issues

Market segmentation

Product positioning

Ch 8 -8

Marketing Issues
Market Segmentation

Subdividing of a market into

distinct subsets of customers
according to needs and buying
habits
Ch 8 -9

Market Segmentation
Geographic
Demographic

Market Segment
Basis

Psychographic
Behavioral

Ch 8 -10

Market Segmentation

Market-development, productdevelopment, market-penetration,

and diversification strategies require
market segmentation
Market segmentation allows
operating with limited resources;
enables small firms to compete
successfully
Market segmentation decisions affect
marketing mix variables
Ch 8 -11

Marketing Mix Variables

Product
Place
Promotion
Price

Ch 8 -12

Marketing Issues
Product Positioning
Schematic representations that reflect
how products/services compare to
competitors on dimensions most
important to success in the industry

Ch 8 -13

Product Positioning Steps

1.
2.
3.
4.
5.

Select key criteria

Diagram map
Plot competitors products
Look for niches
Develop marketing plan
Ch 8 -14

Product-Positioning Map for Banks

Personal
Bank B
Bank A

Bank C

Aggressive

Conservative
Bank D

Bank E

Impersonal
Ch 8 -15

Product-Positioning Map for Personal

Computers
High Capability
Firm 1
Firm 2
Good Customer
Service

Firm 4

Bad Customer
Service

Firm 3

Low Capability
Ch 8 -16

Product-Positioning Map for

Menswear Retail Stores
Very latest, fashionable
menswear

Low Price
Average mass
merchandiser or
discounter

Average specialty
chain
High Price
Average
department store

Conservative, everyday
menswear
Ch 8 -17

Product-Positioning Map for the

Rental Car Market
High Convenience

Firm 1
Firm 2
High Customer
Loyalty

Low Customer
Loyalty

Firm 3
Low Convenience
Ch 8 -18

Product Positioning
Look

for a vacant niche

Dont serve two segments with
the same strategy
Dont position yourself in the
middle of the map
Ch 8 -19

Finance/Accounting Issues
Acquiring needed capital
Developing projected financial
statements
Preparing financial budgets
Evaluating the worth of a business

Ch 8 -20

Finance/Accounting Issues

Raise capital short-term debt, long-term

debt, preferred, or common stock
Lease or buy fixed assets
Determine appropriate dividend payout
ratio
LIFO, FIFO, or market-value accounting
Timeframe of accounts receivable
Discounts on accounts
Amount of cash to be kept on hand
Ch 8 -21

Finance/Accounting Issues
Debt vs. Equity Decisions

EPS/EBIT analysis

Earnings per share/earnings before interest

and taxes

Ch 8 -22

Ch 8 -23

Finance/Accounting Issues
Projected Financial Statement Analysis

Allows an organization to examine the

expected results of various actions and
approaches

Ch 8 -24

Finance/Accounting Issues
Steps in Preparing Projected Financial
Statements
1.

2.

3.

Prepare income statement before balance

sheet (forecast sales)
Use percentage of sales method to project
CGS & expenses
Calculate projected net income
Ch 8 -25

Finance/Accounting Issues
Steps in Preparing Projected Financial
Statements (contd)
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
Ch 8 -26

Projected Income Statement

Ch 8 -27

Projected Balance Sheet

Ch 8 -28

Finance/Accounting Issues
Financial Budget
Details how funds will be obtained
and spent for a specified period of
time

Ch 8 -29

Types of Budgets

Cash budgets
Operating budgets
Sales budgets
Profit budgets
Factory budgets
Capital budgets

Expense budgets
Divisional budgets
Variable budgets
Flexible budgets
Fixed budgets

Ch 8 -30

Finance/Accounting Issues
Evaluating Worth of a Business

Central to strategy implementation

integrative, intensive, and
diversification strategies often
implemented through acquisitions of
other firms

Ch 8 -31

Evaluating Worth of a Business

Three Basic Approaches
1.

What a firm owns

2.

What a firm earns

3.

What a firm will bring in the market

Ch 8 -32

Evaluating Worth of a Business

Net worth or stockholders equity
Net profit conservative value
would be five times the firms
current annual profits
Price-earnings ratio method
Outstanding shares method

Ch 8 -33

Ch 8 -34

Research & Development Issues

New products and improvement of

existing products that allow for effective
strategy implementation

Ch 8 -35

Research & Development Issues

Constraints

Level of support constrained by resource

availability

Technological improvements shorten

product life cycles
Ch 8 -36

Research & Development Issues

Three Major R&D Approaches to
Implementing Strategies
1.

First firm to market new technological

products

2.

Innovative imitator of successful products

3.

Low-cost producer of similar but less

expensive products
Ch 8 -37

Management Information
Systems (MIS) Issues
Having an effective management
information system (MIS) may be the
most important factor in differentiating
successful from unsuccessful firms.

Ch 8 -38

MIS Issues
Functions of MIS

Information collection, retrieval, and

storage
Keeping managers informed
Coordination of activities among divisions
Allows firm to reduce costs

Ch 8 -39