Chapter 1 The Nature of Strategic Management

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Transcript Chapter 1 The Nature of Strategic Management

Ch 9 -1
Copyright © 2011 Pearson Education
Strategic Management: Concepts
and Cases
Arab World Edition
Fred R. David
Abbas J. Ali
Abdulrahman Y. Al-Aali
Chapter 9:
Implementing Strategies:
Marketing, Finance /
Accounting, R&D, and MIS
Issues
Ch 9 -2
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Chapter Outline
• The Nature of Strategy Implementation
• Marketing Issues
• Finance/Accounting Issues
• Research & Development (R&D) Issues
• Management Information Systems (MIS) Issues
Ch 9 -3
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Implementing Strategies
“The greatest strategy is doomed if it’s
implemented badly.”
– Bernard Reimann
“Without planning and integrated studies for
our investment projects, we certainly lose our
competitive edge.”
– Abdul Rahman Bin Ali Al Jeraisy Chairman, Al Jeraisy Group
Ch 9 -4
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Source: Adapted from Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22,
no. 3 (June 1988) 40.
Ch 9 -5
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The Nature of Strategy Implementation
• Strategy implementation means change
• Less than 10% of strategies formulated are successfully
implemented!
Ch 9 -6
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The Nature of Strategy Implementation
Reasons for the low success rate of strategy
implementation:
• Failing to segment markets appropriately
• Paying too much for a new acquisition
• Falling behind competition in R&D
• Not recognizing benefit of computers in managing
information
Ch 9 -7
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The Nature of Strategy Implementation
Ways to successful Strategy Implementation:
• Market goods & services well
• Raise needed working capital
• Produce technologically sound goods
• Sound information systems
Ch 9 -8
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Marketing Issues
Marketing variables affect success/failure of strategy
implementation
Ch 9 -9
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Marketing Issues
Marketing decisions requiring policies:
• Whether to use exclusive dealerships – multiple channels
of distribution
• Whether to use heavy, light, or no TV advertising
• Whether to reward sales people
• Whether to be a price leader or price follower
• Whether to advertise online or not
Ch 9 -10
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Marketing Issues
Centrally important to implementation:
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Market segmentation
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Product positioning
Ch 9 -11
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Marketing Issues
Market Segmentation
Subdividing of a market into distinct subsets of customers
according to needs and buying habits
Ch 9 -12
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Marketing Issues
Market Segmentation (cont’d)
Things that directly affect marketing mix variables:
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Ch 9 -13
Product
Place
Promotion
Price
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Marketing Issues
Geographic
Demographic
Market Segment
Basis
Psychographic
Behavioral
Ch 9 -14
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Marketing Issues
Product Positioning
Schematic representations that reflect how
products/services compare to competitors’ on dimensions
most important to success in the industry
Ch 9 -15
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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
Ch 9 -16
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Ch 9 -17
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Marketing Issues
Product Positioning as Strategy
Implementation Tool
• Look for vacant niche
• Avoid sub optimization
• Don’t serve 2 segments with same strategy
• Don’t position in the middle of the map
Ch 9 -18
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Finance/Accounting Issues
Central to strategy implementation
Ch 9 -19
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Finance/Accounting Issues
Essential for Implementation
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Ch 9 -20
Acquiring needed capital
Developing projected financial statements
Preparing financial budgets
Evaluating worth of a business
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Finance/Accounting Issues
Decisions Based on Finance/Accounting
• Raise capital – short-term, long-term, preferred, or
common stock
• Lease or buy fixed assets
• Determine appropriate dividend payout ratio
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Establish % discount on accounts for terms
• Determine the amount of cash kept on hand
Ch 9 -21
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Finance/Accounting Issues
Capital Acquisition to Implement Strategies
• Debt
• Equity
Ch 9 -22
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Finance/Accounting Issues
Projected Financial Statements
Allow an organization to examine the expected results of
various actions and approaches
Ch 9 -23
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Finance/Accounting Issues
Financial Budget
Details how funds will be obtained and spent for a specified
period of time
Ch 9 -24
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Finance/Accounting Issues
Types of Budgets
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Cash budgets
Operating budgets
Sales budgets
Profit budgets
Factory budgets
Ch 9 -25
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Expense budgets
Divisional budgets
Variable budgets
Flexible budgets
Fixed budgets
Finance/Accounting Issues
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 9 -26
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Research & Development Issues
New products and improvement of existing products that
allow for effective strategy implementation.
Ch 9 -27
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Research & Development Issues
Constraints
• Level of support constrained by resource availability
• Technological improvements shorten product life cycles
Ch 9 -28
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Research & Development Issues
Three Major R&D Approaches to
Implementing Strategies
1. 1st firm to market new technological products
2. Innovative imitator of successful products
3. Low-cost producer of similar but less expensive products
Ch 9 -29
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Management Information Systems (MIS)
Issues
Information is the basis for understanding the firm. It’s one of
the most important factors differentiating successful from
unsuccessful firms.
Ch 9 -30
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MIS Issues
Functions of MIS
• Information collection, retrieval/ feedback , and storage
• Keeping managers informed
• Coordination of activities among divisions
• Allow firm to reduce costs
Ch 9 -31
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Ch 8-Copyright © 2009 Pearson Education, Inc.
32 Publishing as Prentice Hall
The end