Chapter 8
Implementing Strategies: Marketing,
Finance/Accounting, R&D, & MIS Issues
Strategic
Management:
Concepts & Cases
11th Edition
Fred David
Copyright 2007 Prentice Hall
Ch 8-1
Marketing Issues
Centrally important to Implementation
1.
Market segmentation
2.
Product positioning
Copyright 2007 Prentice Hall
Ch 8-2
Marketing Mix – Component Factors
Product
Place
Promotion
Price
Quality
Distribution
channels
Advertising
Level
Features
Distribution
coverage
Personal selling
Discounts &
allowances
Style
Outlet location
Sales promotion
Payment terms
Brand name
Sales territories
Publicity
Packaging
Inventory
levels/locations
Product line
Transportation
carriers
Warranty
Service level
Copyright 2007 Prentice Hall
Ch 8-3
Marketing Issues
Geographic
Demographic
Market Segment
Basis
Psychographic
Behavioral
Copyright 2007 Prentice Hall
Ch 8-4
Marketing Issues
Customer Wants
Product
Positioning
Customer Needs
Copyright 2007 Prentice Hall
Ch 8-5
Product Positioning Steps
1. Select Key Criteria
2. Diagram Map
Product
Positioning
Steps
3. Plot competitors’
products
4. Look for niches
5. Develop Marketing
Plan
Copyright 2007 Prentice Hall
Ch 8-6
Product Positioning Map
High
Convenience
Rental Car Market
•
Firm 2
Firm 1
•
High
Customer
Loyalty
Low
Customer
Loyalty
•
Firm 3
Low
Convenience
Copyright 2007 Prentice Hall
Ch 8-7
Finance/Accounting Issues
Essential for implementation




Acquiring needed capital
Developing projected financial statements
Preparing financial budgets
Evaluating worth of a business
Copyright 2007 Prentice Hall
Ch 8-8
Finance/Accounting Issues
Projected Financial Statements

Allow an organization to examine the expected
results of various actions and approaches
Copyright 2007 Prentice Hall
Ch 8-9
Finance/Accounting Issues
Steps in Preparing Projected Financial
Statements
1.
Prepare income statement before balance
sheet (forecast sales)
2.
Use percentage of sales method to project
CoGS & expenses
3.
Calculate projected net income
Copyright 2007 Prentice Hall
Ch 8-10
Finance/Accounting Issues
Steps in Preparing Projected Financial
Statements (cont’d)
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
Copyright 2007 Prentice Hall
Ch 8-11
Projected Income Statement for Litten Company (in millions)
Prior Year 2005
Projected Year
2006
Remarks
Projected Income Statement
Sales
100
150.00
50% increase
70
105.00
70% of sales
30
45.00
10
15.00
10% of sales
5
7.50
5% of sales
15
22.50
3
3.00
12
19.50
Taxes
6
9.75
Net Income
6
9.75
2
5.00
4
4.75
Cost of Goods Sold
Gross Margin
Selling Expense
Administrative Expense
EBIT
Interest
EBT
Dividends
Retained Earnings
Copyright 2007 Prentice Hall
50% rate
Ch 8-12
Finance/Accounting Issues
Financial Budget
-- Details how funds will be obtained and spent for
a specified period of time
Copyright 2007 Prentice Hall
Ch 8-13
Finance/Accounting Issues
Types of Budgets






Cash budgets
Operating budgets
Sales budgets
Profit budgets
Factory Budgets
Expense Budgets
Copyright 2007 Prentice Hall
Ch 8-14
Finance/Accounting Issues
Types of Budgets




Divisional budgets
Variable budgets
Flexible budgets
Fixed budgets
Copyright 2007 Prentice Hall
Ch 8-15
Finance/Accounting Issues
Evaluating Worth of a Business:
Three Basic Approaches
1.
2.
3.
What a firm owns
What a firm earns
What a firm will bring in the market
Copyright 2007 Prentice Hall
Ch 8-16
Research & Development
Issues
Three Major R&D approaches to implementing
strategies
1.
2.
3.
1st firm to market new technological products
Innovative imitator of successful products
Low-cost producer of similar but less
expensive products
Copyright 2007 Prentice Hall
Ch 8-17
MIS Issues
Functions of MIS




Information collection, retrieval, & storage
Keeping managers informed
Coordination of activities among divisions
Allow firm to reduce costs
Copyright 2007 Prentice Hall
Ch 8-18