GOVT.

COLLEGE UNIVERSITY LAHORE(GCUL)

B.COM SEMESTER 8(|SECTION B)
STRATEGIC MANAGEMENT (MGT-4201)
SYNOPSES CHAPTER 8“IMPLIMENTING STRATEGIES (Functional Issues)”

1. MARKETING ISSUES: numerous marketing variables affect the success or

failure of strategy implementation. Few examples of these variables are:
 Degree to which multiple distribution channels are used
 Degree to which electronic media is used
 Degree to which a business is done with a single customer.
 Degree to which the business strives to become a leader or follower firm.
 Degree to which customers are offered product warranty
 Degree to which sales personnel is compensated
 Degree to which advertising is done online.
Two 2 marketing variables are of central importance to strategy
implementation.
1. Market Segmentation: subdivision of a market in to distinct subsets of
customers according to their needs and buying habits.
2. Product positioning: finding what customers want & expect, from the
view point of customers & not from the view point of producers.
(Producers assumptions about customers’ needs & Wants). So
positioning means “How your products or services compare to
competitors on dimensions most important to success in the industry.”

2. FINANCE/ACCOUNTING ISSUES: several finance/accounting concepts

considered to be central to strategy implementation are:
 Needed capital
 Developing projected financial statement.
 Preparing the financial budgets &
 Evaluating the financial worth of a business(cash value of business to
successfully implement strategy)
To determine a business worth, 3 main approaches can be used:
1. what a firm owns
2. what a firm earns &
3. What a firm will bring in the market.
The evaluation of the worth of the business requires both qualitative and
quantitative skills.
Three 3 Approaches to Evaluate the firms Business worth:
The First Approach is evaluating the worth of a business is determining
the NET WORTH/ STOCKHOLDERS EQUITY net worth is the sum
total of the common stock + additional paid in capital + retained earnings.
The second Approach, to measure the value of a firm through either:
_Taking 5 times of firms’ current annual profit OR
_Taking 5 years average profit.
The third Approach, when it is the market which would determine
“business worth” with the help of 3 further methods viz.:

1. base the firms’ worth on the selling price of a similar company

2. price earning ratio = Market Price of Common Stock
Annual earning per share
And multiply this number by the firm’s average net income for the past 5 years.
3. Outstanding Shares method: no. of shares outstanding* Market. Price per share +
premium per share.

3. HUMAN RESOURCE CONCERNS WHEN IMPLIMENTING

STRATEGIES:
Linking company and personal benefits of employees is a major new strategic
responsibility of HR manager.
HRM must develop performance incentives that link performance and pay
to strategies, Viz.
 Establishing & Administrating an employee stock ownership plan(ESOP)
 Instituting an effective child care policy.
 Providing leadership for managers and employees in a way that allows them to
balance work & family.

4. R & D ISSUES: R & D personnel play an integral part in strategy

implementation. These people develop new products and improve old products in
a way that will allow effective strategy implementation.
The R & D employees perform the following tasks:
 Transferring complex technology
 Adjusting process to local raw materials
 Adopting the processes to local markets.
 Altering the products to particular tastes & specifications.
There must be effective interactions b/w. R & D & other functional
departments in implementing different types of strategies.
There are three 3 major R & D approaches for implementing strategies:
First, be the first firm to market new technological products.
Second, be an innovative imitator of successful products.
Third, be a low cost producer by mass producing products similar to but
less expensive than products recently introduced.
_ R & D activities need to be more closely aligned to business objectives
_ there needs to be expended communication b/w. R & D managers &
strategists.
_ the needs to be regular management support for R & D (especially in
terms of resource availability) to ensure effective implementation of
strategies.

5. MIS ISSUES: The firms that gather, assimilate and evaluate external & internal
info. Reduce costs and gain competitive advantage over other firms in the
following ways:
 Cross selling to customers
 Monitoring suppliers
 Keeping managers and employees informed
 Coordinating activities among divisions
 Managing funds.