Chapter 8:Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues Flashcards
1
Q
The Nature of Strategy Implementation
A
- Less than 10% of strategies formulated are successfully implemented!
2
Q
Low Success Rate – Strategy Implementation
A
- 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
3
Q
Successful Strategy Implementation
A
- Market goods & services well
- Raise needed working capital
- Produce technologically sound goods
- Sound information systems
4
Q
Marketing decisions requiring policies
A
- 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
5
Q
The New Principles of Marketing
A
- Don’t Just talk at consumers- work with them through the marketing process
- Give consumers a reason to participate
- Listen to- and join- the conversation outside the company’s website
- Resist the temptation to sell, sell, sell. Instead attract, attract, attract
- Don’t control online conversations, let it flow freely
- Find a marketing technologists, a person with three excellent skill sets (marketing, technology and social interaction
- Embrace instant messaging
6
Q
Current Marketing Issues
A
- Advertising media
- Purpose-based marketing
- Market segmentation
- Product positioning
7
Q
Market Segmentation
A
- Subdividing of a market into distinct subsets of customers according to needs and buying habits
- 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
8
Q
Market Segment Basis
A
- Geographic
- Demographic
- Physcographic
- Behavioral
9
Q
Marketing Mix Variables
A
- Product
- Price
- Place
- Promotion
10
Q
Marekting Mix- Component Factors: Product
A
- Quality
- Features
- Style
- Brand Name
- Packaging
- Product Line
- Warranty
- Service Level
11
Q
Marketing Mix- Component Factors: Price
A
- Level
- Discount and allowances
- Payment Terms
12
Q
Marketing Mix – Component Factors: Place
A
- Distribution Channels
- Distribution Coverage
- Outlet Location
- Sales territories
- Inventory levels/locations
- Transportation carriers
13
Q
Marketing Mix – Component Factors: Promotion
A
- Advertising
- Personal Selling
- Sales Promotion
- Publicity
14
Q
Product Positioning
A
- Schematic representations that reflect how products/services compare to competitors’ on dimensions most important to success in the industry
- Look for a vacant niche
- Don’t serve two segments with the same strategy
- Don’t position yourself in the middle of the map
15
Q
Product Positioning Steps
A
- Select key criteria
- Diagram map
- Plot competitors’ products
- Look for niches
- Develop marketing plan
16
Q
Finance/Accounting Issues
A
- Central to strategy implementation
- Acquiring needed capital
- Developing projected financial statements
- Preparing financial budgets
- Evaluating the worth of a business
- 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
17
Q
Debt vs. Equity Decisions
A
- EPS/EBIT analysis
- Earnings per share/earnings before interest and taxes
18
Q
Projected Financial Statement Analysis
A
- Allows an organization to examine the expected results of various actions and approaches
19
Q
Steps in Preparing Projected Financial Statements
A
- Prepare income statement before balance sheet (forecast sales)
- Use percentage of sales method to project CGS & expenses
- Calculate projected net income
- Subtract dividends to be paid from net income and add remaining to retained earnings
- Project balance sheet items beginning with retained earnings
- List comments (remarks) on projected statements
20
Q
Financial Budget
A
- Details how funds will be obtained and spent for a specified period of time
21
Q
Evaluating Worth of a Business
A
- Central to strategy implementation – integrative, intensive, and diversification strategies often implemented through acquisitions of other firms
22
Q
Evaluating Worth of a Business- Three Basic Approaches
A
- What a firm owns
- What a firm earns
- What a firm will bring in the market
23
Q
Evaluating Worth of a Business cont’d.
A
- 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
24
Q
Research & Development Issues
A
- New products and improvement of existing products that allow for effective strategy implementation
- Constraints:
- Level of support constrained by resource availability
- Technological improvements shorten product life cycles
25
Q
Three Major R&D Approaches to Implementing Strategies
A
- First firm to market new technological products
- Innovative imitator of successful products
- Low-cost producer of similar but less expensive products
26
Q
Management Information Systems (MIS) Issues
A
- Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms.
27
Q
Functions of MIS
A
- Information collection, retrieval, and storage
- Keeping managers informed
- Coordination of activities among divisions
- Allows firm to reduce costs
