STRATEGIC
IMPLEMENTATION
Presentation By
Group 5
OBJECTIVES
Develop effective perceptual maps to position rival Develop projected financial statements to reveal the
firms. impact of strategy recommendations.
Develop effective perceptual maps to identify Discuss the nature and role of research and
market segments and demand voids. development in strategy implementation.
Determine the cash worth of any Explain how management information systems can determine
the success of strategy-implementation efforts.
business.
Explain market segmentation and product
positioning as strategy-implementation
tools.
Discuss procedures for determining the worth of a Explain business analytics and data mining.
business.
REPORTERS
ANGELA ROSE NOELLE JEAN JHONCHEL FLORES
PAGUINTO LABRAMONTE
KATE PRINCESS TRINA MAER KYLA FRANCHESKA
VILLEGAS INFANTE CUNAN
INTRODUCTION
Strategies have no chance of being
implemented successfully in organizations
that do not market goods and services
well, in firms that cannot raise needed
working capital, in firms that produce
technologically inferior products, or in
firms that have a weak information
system.
THIS CHAPTER EXAMINES:
Marketing
Finance and Accounting
Research and Development
Management Information Systems (MIS)
Special Topics: Market segmentation, market positioning, evaluating the
worth of a business, determining to what extent debt or stock should be
used as a source of capital, developing projected financial statements,
contracting R&D outside the firm, and creating an information support
system. Manager and employee involvement and participation are essential
for success in marketing, finance and accounting, R&D, and MIS activities.
THE NATURE OF STRATEGY
IMPLEMENTATION
Strategy implementation directly
affects the lives of plant managers,
division managers, department
managers, sales managers, product
managers, project managers, personnel
managers, staff managers, supervisors,
and all employees.
A COMPREHENSIVE STRATEGIC-
MANAGEMENT MODEL
CURRENT MARKETING ISSUES
Countless marketing variables affect the success or failure of strategy
implementation efforts. Some example marketing decisions that may require policies
are as follows:
1. How to make advertisements more interactive to be more effective
2. How to best take advantage of Facebook and Twitter conservations about the
company and industry
3. To use exclusive dealerships or multiple channels of distribution
4. To use heavy, light, or no TV advertising versus online advertising
5. To limit (or not) the share of business done with a single customer
6. To be a price leader or a price follower
7. To offer a complete or limited warranty
8. To reward salespeople based on straight salary, straight commission, or a
combination salary and commission
CURRENT MARKETING ISSUES
Marketing is more about building a two-way
relationship with consumers than just informing
consumers about a product or service.
Marketers today must get their customers
involved in their company website and solicit
suggestions from customers in terms of
product development,
THE NEW PRINCIPLES OF
MARKETING
1. Do not just talk at consumers—work with them throughout
the marketing process.
2. Give consumers a reason to participate.
3. Listen to—and join—the conversation outside your company’s
website.
4. Resist the temptation to sell, sell, sell. Instead attract, attract,
attract.
5. Do not control online conversations; let it flow freely.
6. Find a “marketing technologist,” a person who has three excellent skill
sets (marketing, technology, and social interaction).
7. Embrace instant messaging and chatting.
TWO VARIABLES ARE OF CENTRAL IMPORTANCE TO
STRATEGY IMPLEMENTATION:
Market Segmentation
Product Positioning
MARKET SEGMENTATION
Market segmentation is widely used in
implementing strategies, especially for
small and specialized firms. Market
segmentation can be defined as the
subdividing of a market into distinct
subsets of customers according to needs
and buying habits.
3 MAJOR REASONS WHY MARKET
SEGMENTATION IS IMPORTANT
FIRST
strategies such as market development, product
development, market penetration, and
diversification require increased sales through new
markets and products.
SECOND
market segmentation allows a firm to operate with limited
resources because mass production, mass distribution, and
mass advertising are not required.
THIRD...
Finally, market segmentation decisions directly affect
marketing mix variables: product, place, promotion, and price,
Retention-Based
Segmentation
To aid in more effective and efficient deployment of
marketing resources, companies commonly tag each
of their active customers with three values:
Tag 1: Is this customer at high risk of canceling the
company’s service? One of the most common
indicators of high-risk customers is a drop off in
usage of the company’s service. For example, in the
credit card industry this could be signaled through a
customer’s decline in spend ing on his or her card.
Retention-Based
Segmentation
Tag 2: Is this customer worth retaining? This
determination boils down to whether the postre
tention profit generated from the customer is
predicted to be greater than the cost incurred to
retain the customer. Customers need to be managed
as investments.
Retention-Based
Segmentation
Tag 3: What retention tactics should be used
to retain this customer? For customers who
are deemed “save-worthy,” it is essential for
the company to know which save tactics are
most likely
Tactics commonly used range from
providing “special” customer discounts
Tactics commonly used range from providing “special” customer
discounts to sending customers communications that reinforce the
value proposition of the given service.
The basic approach to tagging customers is to use historical
retention data to make predictions about active customers
regarding:
• Whether they are at high risk of canceling their service
• Whether they are profitable to retain
• What retention tactics are likely to be most effective
Tactics commonly used range from
Larana, Inc. providing “special” customer discounts
The idea with retention-based segmentation is to
match up active customers with customers from
historic retention data who share similar attributes.
Using the theory that “birds of a feather flock
together,” the approach is based on the assumption
that active customers will have similar retention
outcomes as those of their comparable
predecessor. This whole process is possible through
business analytics or data mining
ASSESSMENT!
Does the Internet Make
Market Segmentation Easier?
PRODUCT POSITIONING/PERCEPTUAL
MAPPING
After markets have been
segmented so that the firm can
target particular customer groups,
the next step is to find out what
customers want and expect.
PRODUCT POSITIONING/PERCEPTUAL
MAPPING
After markets have been
segmented so that the firm can
target particular customer groups,
the next step is to find out what
customers want and expect.
Product Positioning/Perceptual
Mapping
Identifying target customers on which to focus
marketing efforts sets the stage for deciding
how to meet the needs and wants of particular
consumer groups. Product positioning is widely
used for this purpose. Positioning entails
developing schematic representations that
reflect how products or services compare to
competitors’ on dimensions most important to
success in the industry.
THE FOLLOWING STEPS ARE REQUIRED IN PRODUCT
POSITIONING (SOMETIMES CALLED PERCEPTUAL
MAPPING):
1 2 3
Select key criteria that Diagram a two- Plot major competitors’
effectively differentiate dimensional product- products or services in
products or services in positioning map with the resultant four-
the industry. specified criteria on each quadrant matrix.
axis.
4 5
Identify areas in the
Develop a marketing
positioning map where the
plan to position the
company’s products or
company’s products or
services could be
services appropriately.
most competitive in the given
target market. Look for vacant
areas (niches).
Product Positioning/Perceptual
Mapping
Because just two criteria can be examined on a
single product-positioning (perceptual) map,
multiple maps are often developed to assess
various approaches to strategy
implementation. Multidimensional scaling could
be used to examine three or more criteria
simultaneously, but this technique requires
computer assistance and is beyond the scope
of this text.
SOME RULES FOR USING PRODUCT POSITIONING AS A
STRATEGY-IMPLEMENTATION TOOL ARE THE FOLLOWING:
1 2 3
Do not position yourself in the
Look for the hole or vacant niche. Do not serve two segments with middle of the map. The middle
The best strategic opportunity the same strategy. Usually, a usually means a strategy that is
might be an unserved segment. strategy successful with one not clearly perceived to have any
segment cannot be directly distinguishing characteristics.
transferred to another segment. This rule can vary with the
number of competitors.
Do not position yourself in the
middle of the map. The middle
usually means a strategy that is
not clearly perceived to have any
distinguishing characteristics.
This rule can vary with the
number of competitors.
ACQUIRING CAPITAL TO IMPLEMENT
STRATEGIES
Strategy implementation often requires
additional capital from debt and equity
sources. An EPS/EBIT analysis is a widely used
technique to determine the best alternative
for raising capital for strategies. It examines
the impact of debt versus stock financing on
earnings per share under various EBIT
expectations.
ACQUIRING CAPITAL TO
IMPLEMENT STRATEGIES
An enterprise should have enough debt in its capital
structure to increase return on investment by
applying debt to products and projects earning more
than the cost of the debt. Overly much debt can
endanger stockholders' returns and company
survival. Stock issuances may be better than debt for
raising capital, but concerns include dilution of
ownership, stock price effects, and the need to share
future earnings.
ACQUIRING CAPITAL TO
IMPLEMENT STRATEGIES
Another popular way for a company to raise capital is
to issue corporate bonds, which is analogous to going
to the bank and borrowing money, except that with
bonds the company obtains the funds from investors
rather than banks.
ACQUIRING CAPITAL TO
IMPLEMENT STRATEGIES
Before explaining EPS/EBIT analysis, it is
important to know that EPS is earnings per share,
which is net income divided by number of shares
outstanding. Another term for shares
outstanding is shares issued. Also know that EBIT
is earnings before interest and taxes. Another
name for EBIT is operating income. EBT is
earnings before tax. EAT is earnings after tax
ACQUIRING CAPITAL TO
IMPLEMENT STRATEGIES
The EPS/EBIT analysis is a crucial tool for
determining the highest EPS values for a
company, which is a key measure of success
and is often used in capital acquisition
decisions.
FINANCIAL BUDGET
A financial budget is a plan that outlines
an organization's or individual's
financial goals and how they intend to
achieve them over a specific period,
typically a year. It's a crucial tool for
managing finances effectively and
making informed decisions.
COMPANY VALUATION
Evaluating the worth of a business is central
to strategy implementation because
integrative, intensive, and diversification
strategies are often implemented by acquiring
other firms. Other strategies, such as
retrenchment and divestiture, may result in
the sale of a division of an organization or of
the firm itself.
COMPANY VALUATION
Determining a business’s worth can be
grouped into three main approaches:
What a firm owns
What a firm earns
What a firm will bring in the market
COMPANY VALUATION
The first approach in evaluating the worth of a
business is determining its net worth or
stockholders’ equity. Net worth represents the
sum of common stock, additional paid-in capital,
and retained earnings.
COMPANY VALUATION
The second approach to measuring the value
of a firm grows out of the belief that the worth
of any business should be based largely on the
future benefits its owners may derive through
net profits.
COMPANY VALUATION
The third approach is called the price-earnings ratio method. To use
this method, divide the market price of the firm’s common stock by the
annual earnings per share and multiply this number by the firm’s
average net income for the past five years
The fourth method can be called the outstanding shares method. To
use this method, simply multiply the number of shares outstanding by
the market price per share. If the purchase price is more than this
amount, the additional dollars are called a premium. The outstanding
shares method may be called the “market value” or “market
capitalization” or “book value” of the firm. The premium is a per-share
dollar amount that a person or firm is willing to pay beyond the book
value of the firm to control (acquire) the other company.
RESEARCH AND DEVELOPMENT
ISSUES
Research and development (R&D) often
faces challenges in securing adequate
funding, particularly for high-risk, long-
term projects.
MANAGEMENT INFORMATION
SYSTEM (MIS) ISSUES
Effective information systems
distinguish successful firms from
unsuccessful ones. Management
Information System is essential for firm,
but it requires careful management,
security and constant adaptation to
external challenges.
BUSINESS ANALYTICS
Business analytics is a MIS technique that
involves using software to mine huge volumes
of data to help executives make decisions.
Sometimes called predictive analytics,
machine learning, or data mining, this
software enables a researcher to assess and
use the aggregate experience of an
organization, a priceless strategic asset for a
firm.
BUSINESS ANALYTICS
A key distinguishing feature of business analytics is
that it is predictive rather than retrospective, in that it
enables a firm to learn from experience and to make
current and future decisions based on prior
information. Deriving robust predictive models from
data mining to support hundreds of commonly
occurring business decisions is the essence of learning
from experience.
QUESTION SESSION
If you have any questions, you
are welcome to ask.
THANK YOU
