Ch 8 -1
Implementing Strategies: Marketing,
Finance/Accounting, R&D, and MIS Issues
Ch 8 -2
Ch 8 -3
Implementing Strategies
“The greatest strategy is doomed
if it’s implemented badly.”
– Bernard Reimann
Ch 8 -4
The Nature of Strategy
Implementation
Less than 10% of strategies formulated are
successfully implemented!
Ch 8 -5
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 -6
Ch 8 -7
Current Marketing Issues
• Advertising media
• Purpose-based marketing
Ch 8 -8
Marketing Issues
• Market segmentation
• Product positioning
Ch 8 -9
Marketing Issues
Market Segmentation
• Subdividing of a market into
distinct subsets of customers
according to needs and buying
habits
Ch 8 -10
Market Segmentation
Geographic
Demographic
Market Segment
Basis Psychographic
Behavioral
Ch 8 -11
Market Segmentation
• Market-development, product-
development, 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 -12
Marketing Mix Variables
• Product
• Place
• Promotion
• Price
Ch 8 -13
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 -14
Product Positioning Steps
1. Select key criteria
2. Diagram map
3. Plot competitors’ products
4. Look for niches
5. Develop marketing plan
Ch 8 -15
Product-Positioning Map for Banks
Personal
Bank B
Bank A Bank C
Aggressive Conservative
Bank D
Bank E
Impersonal
Ch 8 -16
Product-Positioning Map for Personal
Computers High Capability
Firm 1
Firm 2
Good Customer Bad Customer
Service Firm 4 Service
Firm 3
Low Capability
Ch 8 -17
Product-Positioning Map for
Menswear Retail Stores
Very latest, fashionable
menswear
Average specialty
chain
Low Price High Price
Average mass
Average
merchandiser or
department store
discounter
Conservative, everyday
menswear
Ch 8 -18
Product-Positioning Map for the
Rental Car Market
High Convenience
Firm 1
Firm 2
High Customer Low Customer
Loyalty Loyalty
Firm 3
Low Convenience
Ch 8 -19
Product Positioning
• Look for a vacant niche
• Don’t serve two segments with
the same strategy
• Don’t position yourself in the
middle of the map
Ch 8 -20
Finance/Accounting Issues
• Acquiring needed capital
• Developing projected financial
statements
• Preparing financial budgets
• Evaluating the worth of a business
Ch 8 -21
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 -22
Finance/Accounting Issues
Debt vs. Equity Decisions
• EPS/EBIT analysis
▫ Earnings per share/earnings before interest
and taxes
Ch 8 -23
Ch 8 -24
Finance/Accounting Issues
Projected Financial Statement Analysis
• Allows an organization to examine the
expected results of various actions and
approaches
Ch 8 -25
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
CGS & expenses
3. Calculate projected net income
Ch 8 -26
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 items beginning with
retained earnings
6. List comments (remarks) on projected
statements
Ch 8 -27
Projected Income Statement
Ch 8 -28
Projected Balance Sheet
Ch 8 -29
Finance/Accounting Issues
Financial Budget
Details how funds will be obtained
and spent for a specified period of
time
-30
Types of Budgets
• Cash budgets • Expense budgets
• Operating budgets • Divisional budgets
• Sales budgets • Variable budgets
• Profit budgets • Flexible budgets
• Factory budgets • Fixed budgets
• Capital budgets
-31
Finance/Accounting Issues
Evaluating Worth of a Business
• Central to strategy implementation –
integrative, intensive, and
diversification strategies often
implemented through acquisitions of
other firms
-32
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
-33
Evaluating Worth of a Business
• Net worth or stockholder’s equity
• Net profit – conservative value
would be five times the firm’s
current annual profits
• Price-earnings ratio method
• Outstanding shares method
-34
-35
Research & Development Issues
New products and improvement of
existing products that allow for effective
strategy implementation
-36
Research & Development Issues
Constraints
• Level of support constrained by resource
availability
• Technological improvements shorten
product life cycles
-37
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
-38
Management Information
Systems (MIS) Issues
Having an effective management
information system (MIS) may be the
most important factor in
differentiating successful from
unsuccessful firms.
-39
MIS Issues
Functions of MIS
• Information collection, retrieval, and
storage
• Keeping managers informed
• Coordination of activities among
divisions
• Allows firm to reduce costs
