ch8 - implementing strategies (10th)
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8/8/2019 Ch8 - Implementing Strategies (10th)
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Copyright 2005 Prentice Hall Ch 8-1
Chapter 8Implementing Strategies: Marketing,
Finance/Accounting, R&D, & MIS Issues
Strategic Management:
Concepts & Cases10th Edition
Fred David
PowerPoint Slides by
Anthony F. Chelte
Western New England College
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Copyright 2005 Prentice Hall Ch 8-2
1. Market segmentation
2. Product positioning
Marketing Issues
Centrally important to Implementation
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Ch 8-3
Marketing Mix ± Component Factors
Service level
Warranty
Transportation
carriersProduct line
Inventory
levels/locationsPackaging
PublicitySales territoriesBrand name
Payment termsSales promotionOutlet locationStyle
Discounts &
allowancesPersonal selling
Distribution
coverageFeatures
Level AdvertisingDistributionchannels
Quality
PricePromotionPlaceProduct
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Copyright 2005 Prentice Hall Ch 8-4
Marketing Issues
Market SegmentBasis Psychographic
Behavioral
Geographic
Demographic
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Copyright 2005 Prentice Hall Ch 8-5
Marketing Issues
ProductPositioning
Customer Wants
Customer Needs
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Copyright 2005 Prentice Hall Ch 8-6
Product Positioning Steps
ProductPositioning
Steps
2. Diagram Map
1. Select Key Criteria
3. Plot competitors¶products
4. Look for niches
5. Develop MarketingPlan
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Copyright 2005 Prentice Hall Ch 8-7
Product Positioning Map
Low
Convenience
High
Customer
Loyalty
Low
Customer
Loyalty
HighConvenience
Firm 1
Firm 2
Firm 3
R ental Car Market
Low
Customer
Loyalty
HighConvenience
Firm 1
Firm 2
Firm 3
R ental Car Market
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Copyright 2005 Prentice Hall Ch 8-9
EPS-EBIT Analysis (in $millions) ± Heinz
Company
Stock Financing Financing Financing
High Low High Low High Low
EBIT ($982.4 in 2001) $2000 $1000 $2000 $1000 $2000 $1000
Interest (5%) 0 0 25 25 10 10
EBT 2000 1000 1975 975 1990 990
Taxes 26% 520 260 514 254 517 257
EAT 1480 740 1461 721 1473 733
# Shares outstanding 362.5 362.5 350 350 357.5 357.5
EPS 4.08 2.04 4.17 2.06 4.12 2.05
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Copyright 2005 Prentice Hall Ch 8-10
Conclusion:
Heinz should use debt to raise the $500 million
Finance/Accounting Issues
EPS-EBIT Analysis Heinz
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Copyright 2005 Prentice Hall Ch 8-11
Allow an organization to examine the expectedresults of various actions and approaches
Finance/Accounting Issues
Projected Financial Statements
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Copyright 2005 Prentice Hall Ch 8-12
Projected Income Statement for Litten Company (in millions)
Prior Year 2004
Projected Year
2005 Remarks
Projected Income Statement
Sales 100 150.00 50% increase
Cost of Goods Sold 70 105.00 70% of sales
Gross Margin 30 45.00
Selling Expense 10 15.00 10% of sales
Administrative Expense 5 7.50 5% of sales
EBIT 15 22.50
Interest 3 3.00
EBT 12 19.50
Taxes 6 9.75 50% rateNet Income 6 9.75
Dividends 2 5.00
Retained Earnings 4 4.75
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Copyright 2005 Prentice Hall Ch 8-13
-- Details how funds will be obtained and spent for a specified period of time.
Finance/Accounting Issues
Financial Budget
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Copyright 2005 Prentice Hall Ch 8-14
Cash budgets
Operating budgets Sales budgets
Profit budgets
Factory Budgets
Expense Budgets
Finance/Accounting Issues
Types of Budgets
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Copyright 2005 Prentice Hall Ch 8-15
Divisional budgets Variable budgets
Flexible budgets
Fixed budgets
Finance/Accounting Issues
Types of Budgets
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Copyright 2005 Prentice Hall Ch 8-16
1. What a firm owns
2. What a firm earns
3. What a firm will bring in the market
Finance/Accounting Issues
Evaluating Worth of a Business:
3 Basic Approaches
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Copyright 2005 Prentice Hall Ch 8-17
1. 1st firm to market new technological products
2. Innovative imitator of successful products
3. Low-cost producer of similar but less
expensive products
Research & Development
Issues
3 Major R&D approaches to implementing
strategies
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Copyright 2005 Prentice Hall Ch 8-18
Information collection, retrieval, & storage
Keeping managers informed
Coordination of activities among divisions
Allow firm to reduce costs
MIS Issues
Functions of MIS
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