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Strategic Management

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4 views17 pages

Strategic Management

Uploaded by

khadija.hasni110
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 5

Strategies in Action

Strategic Management: 
Concepts & Cases
13th Edition

Fred David



Copyright © 2011 Pearson Education, Inc. Ch 5 -1


Publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. Ch 5 -2
Publishing as Prentice Hall
Long Term Objectives

 Quantitative  Challenging

 Measurable  Hierarchical

 Realistic  Obtainable

 Understandable  Congruent
Copyright © 2011 Pearson Education, Inc. Ch 5 -3
Publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. Ch 5 -4
Publishing as Prentice Hall
Financial vs. Strategic Objectives
Financial Objectives
Growth in revenues
Growth in earnings
Higher dividends
Larger profit margins
Greater ROI
Higher earnings per share
Rising stock price
Improved cash flow
Copyright © 2011 Pearson Education, Inc. Ch 5 -5
Publishing as Prentice Hall
The Balanced Scorecard

Robert Kaplan & David Norton –

Strategy evaluation & control technique


Balancefinancial measures with
nonfinancial measures
Balanceshareholder objectives with
customer & operational objectives
Copyright © 2011 Pearson Education, Inc. Ch 5 -6
Publishing as Prentice Hall
Levels of Strategies – 
Large Company

Copyright © 2011 Pearson Education, Inc. Ch 5 -7


Publishing as Prentice Hall
Levels of Strategies – 
Small Company

Copyright © 2011 Pearson Education, Inc. Ch 5 -8


Publishing as Prentice Hall
Types of Strategies

Forward 
Integration


Vertical  Backward
Integration Integration
Strategies

Copyright © 2011 Pearson Education, Inc. Ch 5 -9


Publishing as Prentice Hall
Vertical Integration Strategies
Forward Gaining ownership or increased
Integration control over distributors or retailers

Backward Seeking ownership or increased


Integration control of a firm’s suppliers

Copyright © 2011 Pearson Education, Inc. Ch 5 -10


Publishing as Prentice Hall
Types of Strategies

Market
Penetration


Intensive Market
Strategies Development

Product
Development

Copyright © 2011 Pearson Education, Inc. Ch 5 -11


Publishing as Prentice Hall
Intensive Strategies
Seeking increased market share for
Market present products or services in
Penetration present markets through greater
marketing efforts

Market Introducing present products or


Development services into new geographic areas

Seeking increased sales by improving


Product
present products or services or
Development developing new ones

Copyright © 2011 Pearson Education, Inc. Ch 5 -12


Publishing as Prentice Hall
Types of Strategies

Related
Diversification


Diversification
Strategies

Unrelated
Diversification

Copyright © 2011 Pearson Education, Inc. Ch 5 -13


Publishing as Prentice Hall
Diversification Strategies

Related Adding new but related products or


Diversification services

Unrelated Adding new, unrelated products or


Diversification services

Copyright © 2011 Pearson Education, Inc. Ch 5 -14


Publishing as Prentice Hall
Types of Strategies

Retrenchment


Defensive Divestiture
Strategies

Liquidation

Copyright © 2011 Pearson Education, Inc. Ch 5 -15


Publishing as Prentice Hall
Defensive Strategies
Regrouping through cost and asset
Retrenchment reduction to reverse declining sales
and profit

Divestiture Selling a division or part of an


organization

Selling all of a company’s assets, in


Liquidation parts, for their tangible worth

Copyright © 2011 Pearson Education, Inc. Ch 5 -16


Publishing as Prentice Hall
Porter’s Five Generic Strategies

 Type 1 Cost Leadership – Low cost


 Type 2 Cost Leadership – Best value

 Type 3 Differentiation

 Type 4 Focus – Low cost

 Type 5 Focus – Best value

Copyright © 2011 Pearson Education, Inc. Ch 5 -17


Publishing as Prentice Hall

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