1. Market segmentation, product positioning, acquiring needed capital, and developing financial projections are central to successful strategy implementation. 2. Market segmentation involves dividing a market into subsets according to customer needs and buying habits. Product positioning involves comparing products to competitors on important dimensions. 3. Acquiring capital requires determining the best sources such as debt, equity, or a combination. Financial projections allow an organization to examine the results of various actions through pro forma financial statements and budgets.

1. Chapter 7

2. Some reasons for low success rate
• 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
Successful Strategy Implementation
• Market goods & services well
• Raise needed working capital
• Produce technologically sound goods
• Sound information systems

3. Marketing decisions requiring policies
• Exclusive dealerships – multiple channels of distribution
• Heavy, light, or no TV advertising
• Price leader or price follower
• Advertise online or not
• Offer complete or limited warranty
• Salespersons reward structure
Centrally important to Implementation
1. Market segmentation
2. Product positioning

5. Subdividing of a market into distinct subsets of customers
according to needs and buying habits
Important because:
• Key to matching supply & demand
• Market and product development, market penetration, and
diversification require increased sales through new markets or products
• Firm can operate with limited resources.
• Segmentation decisions directly affect marketing mix variables
• Enables small firms to compete successfully

7. Schematic representations that reflect how products/services
compare to competitors’ on dimensions most important to success
in the industry.
Action Steps in Product Positioning
1. Select key criteria that are differentiators in the industry.
2. Diagram a two-dimensional product positioning map.
3. Plot major competitors’ products or services in the matrix.
4. Identify areas in the positioning map where firm’s products could be most
competitive. Look for niches.
5. Develop a marketing plan to position firm’s products appropriately.

11. – Central to strategy implementation
Essential for Implementation
• Acquiring needed capital
• Developing projected financial statements
• Preparing financial budgets
• Evaluating worth of a business

12. Decisions that may require policies:
• Raise capital with short-term debt, long-term debt,
preferred stock, or common stock
• Lease or buy fixed assets
• Determine dividend payout ratio
• LIFO, FIFO, or market-value accounting approach
• Extend the time of accounts receivable
• Determine the amount of cash on hand

13. Capital Acquisition
Sources of capital:
• Net profit from operations
• Sale of assets
• Debt
• Equity
Debt vs. Equity Decisions - EPS/EBIT analysis
Determination of debt, stock, or combination of debt
& stock is best alternative for raising capital to
implement strategies

14. Debt vs. Equity Decisions - EPS/EBIT analysis

15. Steps in Pro Forma Financial Analysis
1. Prepare income statement before balance sheet (forecast
sales).
2. Use percentage of sales method to project CGS &
expenses.
3. Calculate projected net income.
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.
Allow an organization to examine the expected
results of various actions and approaches

17. Details how funds will be obtained and spent for a specified
period of time.

18. Evaluating Worth of a Business
Central to strategy implementation – integrative,
intensive, and diversification strategies often
implemented through acquisitions of other firms
Three Basic Approaches
1. What a firm owns
2. What a firm earns
3. What a firm will bring in the market

20. • Development of new products and
improvement of existing products
• Strategies of product development,
market penetration, and concentric
diversification require R&D
• R&D policies match market
opportunities with internal capabilities

21. Policies enhance strategy-implementation
efforts:
1. Product or process improvements
2. Stress basic or applied research
3. Leaders or followers in R&D
4. Develop robotics or manual processes
5. Spend high, average, or low on R&D
6. Perform R&D internal or outsource
7. Use university resources or private

22. 1. First mover in new technological
products
2. Innovative imitator of successful
products
3. Low-cost producer through mass
production similar to recently
introduced products

23. Information is the basis for understanding the firm. It’s one of
the most important factors differentiating successful from
unsuccessful firms.
Functions of MIS
• Information collection, retrieval, and storage
• Keeping managers informed
• Coordination of activities among divisions
• Allow firm to reduce costs