1.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 5 -1
Chapter 5
Strategies in Action
Strategic Management:
Concepts & Cases
13th Edition
Fred David

2.
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Publishing as Prentice Hall
Ch 5 -2

3.
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Ch 5 -3
Long Term Objectives
 Quantitative
 Measurable
 Realistic
 Understandable
 Challenging
 Hierarchical
 Obtainable
 Congruent

4.
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Publishing as Prentice Hall
Ch 5 -4

5.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 5 -5
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

6.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 5 -6
The Balanced Scorecard
Robert Kaplan & David Norton –
Strategy evaluation & control technique
Balance financial measures with
nonfinancial measures
Balance shareholder objectives with
customer & operational objectives

7.
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Publishing as Prentice Hall
Ch 5 -7
Levels of Strategies –
Large Company

8.
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Publishing as Prentice Hall
Ch 5 -8
Levels of Strategies –
Small Company

9.
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Ch 5 -9
Types of Strategies
Vertical
Integration
Strategies
Forward
Integration
Backward
Integration

10.
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Ch 5 -10
Vertical Integration Strategies
Forward
Integration
Gaining ownership or increased
control over distributors or retailers
Backward
Integration
Seeking ownership or increased
control of a firm’s suppliers

11.
Copyright © 2011 Pearson Education, Inc.
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Ch 5 -11
Types of Strategies
Intensive
Strategies
Market
Penetration
Market
Development
Product
Development

12.
Copyright © 2011 Pearson Education, Inc.
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Ch 5 -12
Intensive Strategies
Market
Penetration
Seeking increased market share for
present products or services in
present markets through greater
marketing efforts
Market
Development
Introducing present products or
services into new geographic areas
Product
Development
Seeking increased sales by
improving present products or
services or developing new ones

13.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 5 -13
Types of Strategies
Diversification
Strategies
Related
Diversification
Unrelated
Diversification

14.
Copyright © 2011 Pearson Education, Inc.
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Ch 5 -14
Diversification Strategies
Related
Diversification
Adding new but related products or
services
Unrelated
Diversification
Adding new, unrelated products or
services

15.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 5 -15
Types of Strategies
Defensive
Strategies
Retrenchment
Divestiture
Liquidation

16.
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Ch 5 -16
Defensive Strategies
Retrenchment
Regrouping through cost and asset
reduction to reverse declining sales
and profit
Divestiture Selling a division or part of an
organization
Liquidation
Selling all of a company’s assets, in
parts, for their tangible worth

17.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 5 -17
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